ATLANTA — IHG Hotels & Resorts' growth strategy is coming to fruition, according to Julienne Smith, IHG's chief development officer for the Americas.
In a video interview with Hotel News Now at the recent Hunter Hotel Investment Conference, Smith said the United Kingdom-based company has recently signed twice as many deals in the luxury and lifestyle segment than it had five years ago.
Six out of IHG's 19 brands are in the luxury and lifestyle segment. They include Six Senses, Regent Hotels & Resorts, Kimpton Hotels & Restaurants, InterContinental Hotels & Resorts, Hotel Indigo and Vignette Collection.
"When you look at our pipeline for last year and what we signed, about 15% of our pipeline is luxury and lifestyle; so again, that's double from what we've done previously. Eighty-five percent is still mainstream or upper-midscale ... extended-stay brands. That's where our bread and butter has been as a company, so these additional brands that we've added have really given us scale and given us weight with key accounts and those who want to have a stay experience across the breadth of our portfolio," she said.
Today, about two-thirds of signings across IHG's brands are new builds despite the economic environment being more conducive to existing hotels and conversions, Smith added.
About one-third are conversions, and that's still many more conversions than IHG has ever signed.
"Some of that is some of the brands we've launched like Garner, which is a conversion brand [and] Voco, which has been primarily conversion. Most of our brands are conversion-friendly," she said. "Lenders favor a cash-flowing hotel. They like to see what the historical is to maybe project what the new brand could do, so that tends to be a little bit more favorable in this type of environment. A third of our pipeline being conversions is about right where it would make sense for the environment that we're in."
For more insight on development trends from Julienne Smith, watch the video above.