While analysts consistently report that
midscale hotels with food and beverage lag behind the rest of the
hotel industry in terms of revenue per available room, Holiday Inn,
the archetypal brand in that category, is experiencing a boom in
development. Stevan Porter, president of the Americas for
InterContinental Hotels Group, which owns the Holiday Inn brand,
spoke to Travel Weekly contributing editor Harvey Chipkin about the
future of the brand.
Q:
Hotel analysts invariably portray the category of midscale with
F&B as lagging behind other segments in the industry. How do
you explain the growing development pipeline for Holiday
Inn?
A:
Those analysts parse the industry in a way that developers perceive
it, not necessarily how consumers perceive it.
Consumers want a
product thats affordable, approachable and widely available. If you
look at it that way, you would combine the midscale category with
and without food and beverage and find a robust segment with a lot
of growth.
Mixing developer
and guest interests can get confusing and might drive incorrect
questions that lead to misleading charting by analysts.
Q:
But what about the midscale with F&B category on its
own?
A:
In the last two years, Holiday Inn has signed a record number of
agreements, ahead of any prior year in the brands 53-year history.
This is a strong indicator for the category.
At the end of last
year, we had signed deals for 212 Holiday Inns in the Americas and
another 87 outside of the Americas.
Q:
How do you account for those numbers?
A:
The overall industry strength is due to a number of factors,
including the growth of the Internet, the emergence of low-fare
airlines and significant growth in demand for leisure travel and
meetings.
Q:
How have you changed the product to appeal to younger travelers and
changing travel habits in general?
A:
Most of the new Holiday Inns will be our new prototype, which is
smaller and has less meeting space. In addition, while they do
serve a full breakfast and dinner and offer room service, lunch is
an option depending on the market.
Also, we have
reduced the square footage of the kitchen, simplified menus and
provided buffets.
We also have
enhanced technology that allows for efficiencies.
Combined with the
tweaking of the style and personality of the experience, we create
a product that is both more appealing to developers and to changing
consumer habits, which is the balancing act we always have to
perform.
Q:
What about all those new brands aiming squarely at the travelers in
the Generation X and Millennial demographic groups?
A:
Holiday Inn has an extraordinarily high penetration in those
markets. And baby boomers continue to be the largest consumers of
room nights.
Also, the brand is
incredibly well positioned for emerging markets. Holiday Inn was
the first brand in China and is the biggest operator there. We are
seen as a domestic as well as an international brand.
In a few years,
there will be 100 million outbound travelers from China, and they
will be seeking out our brand.
To
contact reporter Harvey Chipkin, send e-mail to [email protected].