Keith Barr, CEO of InterContinental Hotels Group (IHG), recently oversaw the $300 million acquisition of the luxury wellness brand Six Senses Hotels, Resorts and Spas. In Seville, Spain, for the World Travel & Tourism Council's Global Summit this month, Barr sat down with news editor Johanna Jainchill to discuss the Six Senses integration, Brexit and why homesharing doesn't make sense for IHG.
Q: It's been said that IHG promised to be pretty hands-off with Six Senses. Is that the plan?
A: I spent two and a half years getting to know the principals, and they were really focused on ensuring that if they sold the company, it would land with a leader who understood the culture, the value, the importance of Six Senses' DNA. They wanted to make sure that we maintained the integrity of the brand and help it grow and achieve its potential. The way I achieved it was having their management team talk to the management team over at Kimpton, which we bought years ago and which is still independent, still based in San Francisco, still operate their hotels. What we want to do is enable Six Senses to grow. We'll eventually put it into loyalty, into our channels, into our distribution, into our sales agreements. But what makes Six Senses special is the focus on wellness and sustainability and community, the culture they've established. We're not going to touch that. We've paid for something special, and we don't want to screw it up.
Q: Where will we see Six Senses grow?
A: We could be at 60 hotels in 10 years. We are having conversations throughout the Caribbean, throughout Europe. There are opportunities in Asia, India. It's underpenetrated. It's an Asian brand today that has really great resonance with customers. You could see us in multiple destinations in the U.S. and Canada, throughout Latin America and Mexico, throughout Europe.
Q: Is Brexit impacting your business?
A: The U.K. is actually a small part of our business, less than 3%. It's an important market, but it's small. My concerns about Brexit are twofold: continued uncertainty for business and then business in turn not investing and hiring, which will then be an economic drag on the U.K. from a GDP perspective. And our industry correlates quite closely with GDP. So while it's not a major part of our business, it's an important market, and if GDP continues to soften in the U.K., then you'll see an impact on our business to some degree. So the government needs to sort out Brexit. But everyone's been saying that every single day now for a year, and we're still where we're at. I think there's a real lack of understanding in the services sector of how much labor is actually from the rest of the EU. Having that availability of the labor in order to have a vibrant, growing hospitality industry is critical. That's a definite concern, and we've expressed that issue to the government.
Q: While several other hotel companies, namely Marriott, are dipping their toes into homesharing, IHG is not. What's your position on this sector?
A: I've not been very keen to do it. I haven't seen it to be a very scalable, consistent, profitable model in the way we would need to deliver it with our customer base. Because, effectively, we are about quality and consistency and standards and so forth. When you think about consistent fire safety, consistent operating standards, design standards, the list goes on. To provide a great customer experience in nonstandardized product to scale and make any money doing it is hard to do. You can do it if you just didn't necessarily care about the customer experience and make it more profitable.
But we're very focused on delivering the customer experience. I wouldn't say never, but if we did it, it would have to be some interesting hybrid model that we haven't come up with yet. But as it exists today, we wouldn't be going into it. We have more than enough opportunity with our existing brands and new brands to grow the business.