IHG Details New Midscale Brand
New-build, value-centric flag to debut in 2019
InterContinental Hotels Group (IHG) unveiled more information about its new midscale brand at its 2017 Americas Conference in Las Vegas. The hotel giant tapped London-based consultant forpeople to help create the concept, which is currently dubbed Project Horizon.
The brand’s official name, logo and other elements will be announced later this year. (As reported previously on BoutiqueDesign.com, preliminary information on the flag was disclosed by Elie Maalouf, IHG’s ceo, the Americas, earlier this month at the NYU International Hospitality Investment Conference.)
IHG officials say the new-build brand will target more than 14 million guests “in a vastly underserved segment of the U.S. midscale market,” which the company estimates to be worth $20 billion in annual revenues. Central to the concept is providing the basics at a lower price point—including about $10 to $15 less per night than IHG’s Holiday Inn Express brand. Working with its owner advisory board, the brand’s development has been guided by feedback from owners and operators, according to IHG.
“This new brand builds on IHG’s leading position in the midscale segment alongside Holiday Inn and Holiday Inn Express,” says IHG ceo Richard Solomons. “It addresses the needs of a rapidly growing and underserved segment and we believe it will shape the future of this unique midscale category. This launch will extend our track record of innovation and brand development, with a new offering that is right for our guests, our owners and our shareholders.”
IHG expects the brand to be franchise-ready this fall, with the first hotels starting construction in early 2018 and opening in 2019. Initial development will be focused in the U.S.
Plans for the flag include:
- Guest rooms designed for sleep and noise reduction with “high-quality” mattresses and linens, as well as in-room climate control. Accommodations will be a mix of 220-sq.-ft. king rooms (65 percent) and 275-sq.-ft. queen/queen (35 percent), featuring a built-in work space, open closet storage with a luggage shelf, a shower and a smart TV.
- Intimate public spaces, including seating designed for travelers who wish to spend 30 to 45 minutes in the lobby working, socializing or eating breakfast. Based on market dynamics, optional amenities will include a pool and porte cochere.
- Technology such as a cloud-based reservation system and mobile check-in and check-out. Rooms will be home to entertainment options that allow guests to stream content from their smart devices to in-room TVs.
- What officials describe as a “fresh, no-nonsense, complimentary breakfast,” including brand-name goods that can be consumed in the lobby or on the go. The offering provides owners with a low-cost operating model, according to IHG.
- A new-build construction concept with an average lot size of about 1.5 acres. The prototype design features 95 to 100 keys, with a minimum of three stories.
- “These travelers will often spend hours researching hotels to find a great and affordable lodging experience in this segment,” says Maalouf. “When they can’t find it, they compromise, accepting lower standards and an inconsistent experience to get the price they want. We will change that with this new brand by delivering a superior guest experience that doesn’t currently exist at this price point.”
According to the company, key elements of the initial owner offer will include a target build cost between $85,000 and $90,000 per key (excluding land costs), as well as a 5 percent royalty fee. (In addition, the first 100 signed license agreements will be eligible for a 2 percent fee discount in year one, and a 1 percent fee discount in year two.)