(Corrected on March 3 to change a quote on IHG's upcoming Kimpton developments in the 10th paragraph.)
Decentralizing European operations and launching new brands in the continent — notably Voco Hotels and Kimpton Hotels & Restaurants — have been the main focuses in the past 24 months for Karin Sheppard, senior vice president and managing director, Europe, at IHG Hotels & Resorts.
And that was while navigating the challenges of 2020 and COVID-19, which added complexity across European countries all at differing stages of lockdown restrictions and reopening.
“The industry has its immediate challenges, of course, but 2020 was a fantastic year in that there was so much to set up in decentralizing across Europe, to allow regions to flourish, which we needed to do, and to start launching brands such as Voco and Kimpton," Sheppard said in an exclusive interview with Hotel News Now.
“And then we have COVID-19 … but it has made us even more determined to build the business back up and accelerate it. I feel a great deal of energy, and hope and optimism.”
She started her career at IHG approximately 20 years ago and was promoted to her current role in 2018, stepping up from her role of chief operating officer for Australasia and Japan.
The industry's reliance on conversions and the continuing strength in the luxury segment run parallel to but also underline IHG’s push of its Voco and Kimpton brands in Europe, Sheppard said.
Two hotels recently announced in Scotland mark the Voco brand’s debut there. Both assets — a 150-room hotel in Edinburgh and a 230-room hotel in Glasgow — are due to open this month.
“Building and opening hotels remains strong in Europe. Yes, perhaps not as strong as it has been due to the pandemic, but there is continued interest across the continent. Voco was designed for conversions, in that it allows for individuality and flair. We have another [Voco] coming to The Hague later this year,” she said.
She added Kimpton is realizing excellent potential and interest, too.
“There will be a Kimpton in Paris by the middle of this year. Overall, appetite is strong, and there is great hope from what we believe will be a huge rebound in travel and investment appetite,” she said.
IHG and other major hotel firms realized early during the pandemic that conversions would be more important in terms of the percentage of hotels signed as hotels struggled or entered distress.
“Independents will need the support absolutely to continue. Conversions are a way to help everyone we can to get through the pandemic,” Sheppard said.
Of the regions under her management, she said Eastern Europe holds a lot of excitement, especially in its capitals. A conversion in Hungary’s capital, Budapest, will soon result in a Crowne Plaza.
She added that there was much activity in Southern Europe and more interest in conversions coming from the United Kingdom and Germany.
Sheppard said IHG’s new regional focus allows for a better understanding country to country.
“There are feet on the ground. It has been tough, with some markets only permitting essential travel, and these include Germany and the U.K.," she said. "France tried to stay open, but could not. We cannot change that, and so we support hotels and owners to navigate it all and then reopen.
“Opening pace will vary. In the U.K., 300 of our 350 hotels are open, albeit to key workers, and that has helped us trade through" the pandemic, she said.
She said the company is looking forward to May 17, when the U.K. government has announced hotels can reopen.
"Conversely, Russia is in a ramp-up model, and Poland, too, is freeing up travel,” she said. “The aim now is to reopen hotels if they are closed, with all their commercial components, and to generate cash as fast as possible for our owners."
New Signs of Hope
She said IHG’s Journey to Tomorrow program is a 10-year plan for how the company wants to behave responsibly and build on initiatives already in place.
That is not sloganeering, she said, but a concerted effort to underline the firm’s core purpose as “true hospitality for good” around five key commitments — diversity, community, energy, waste and carbon footprint.
“One really important element is about well-being, and how we think of that. Pre-pandemic, we were well underway with flexible working, leaving it to the individual to know the best outcome, but COVID-19 has fast-tracked that to virtual working. How do we learn the absolute benefits of what has happened and, counter to that, the human need for connection and collaboration?” she said.
Sheppard added that more personal choice and individuality will likely come to the forefront for guests and staff.
“What is our role in our communities? We have 400,000 colleagues in more than 100 countries, and we need to amplify the importance of every hotel in their communities, from the development of skills and learning, working with schools to bring in people to hotels and around disaster relief, to allow our colleagues to move faster and make funds available,” she added.
Sheppard said one example of this in action was in Vienna, where one of her general managers started cooking meals from the hotel’s kitchen and distributing them into the community.
“We have set up partnerships with food banks, as another example. This is executed locally, and it has more power when it is so,” she said.
She added that “the program’s science-based targets are ambitious” in a shrinking trading environment but that these plans put into action now are not only good for communities but also for owners.
She pointed to an internal study in which 82% of respondents said it was important for them to choose a hotel brand that operated responsibly and that they would be willing to spend an average of 31% per night more on accommodations that meet that requirement.
“It is something that everyone wants us to do, to create savings for our hotel owners and to please guests, who have become [more] vocal of businesses’ aspirations. Owners are hugely supportive of this. They, too, want to operate businesses that are caring,” Sheppard said.
A huge change, Sheppard said, is how coronavirus has made all communities reflective of the lives people are living.
“The link with local communities has strengthened, and this is coupled with the deep desire to travel, the absence of excitement, inspiration and escapism. People crave it, and we have seen bookings go up rapidly" in those markets that have announced reopening timelines, she said.
Staycations will be prevalent this year, as they were in summer 2020, Sheppard added.
“Making responsible and sustainable choices is something many of us have had time to reflect on over the past 11 months, as has how and where we will travel next,” she said.