• IHG goes 2-4-1

InterContinental Hotels Group has announced plans for multiple dual-branded hotel developments across the US.

The company said that such sites would allow greater efficiencies for owners, but insisted that they would not compromise the brands, despite facilities such as pools and food & beverage facilities being shared.

The first dual-branded property will be in Atlanta, owned by AWH Partners and operated by Spire Hospitality, with the hotel franchised by an affiliate of IHG. The development will see the 501-room Hotel Melia converted to a Crowne Plaza hotel, to be joined by a 102-room Staybridge Suites hotel.

Other development plans for dual-branded IHG hotels include a Holiday Inn and Candlewood Suites hotel in Illinois, a Crowne Plaza and Staybridge Suites hotel for San Diego and an IHG-managed Hotel Indigo and Holiday Inn Express hotel for Austin, Texas.

Joel Eisemann, chief development officer, the Americas, IHG, said: “Dual-branded hotels are attractive for our owners because they are able to achieve construction cost savings, through shared facilities such as meeting space, swimming pools, fitness facilities and back-of-house areas, as well as operational savings, through shared services.

“With a dual-branded property, our owners are able to cater to many different stay occasions in the same location while generating a more profitable bottom line.”

Kirk Kinsell, president, the Americas, IHG, added: “We are well-placed to grow market share with a high-quality pipeline and through continued innovative guest offerings including dual-branded properties. These hotels are ideal for urban and suburban destinations alike and we are excited that one is opening right here in Atlanta.”

At IHG, none of the planned dual sites feature hotels from opposing ends of the star rating spectrum, meaning that a shared pool is unlikely to result in a culture clash. With development in the US remaining stilted, the move will instead allow the group to pull off the ultimate two-for-one deal with its pipeline.

 

HA Perspective [by Chris Bown]: Fly first class, and you’ll still walk down the same gangway and be greeted by the same staff as you turn left, while your fellow budget travellers turn right. Airlines appear to have the balance right, getting away with some common parts while ensuring the majority of your experience is what you specifically bought into.

With a dual branded hotel, that same balance needs to be struck. Is it simply back office support functions that are shared, or is it reception and circulation areas? That’s a challenge for brand managers, and for those training customer-facing staff in a dual branded property. A high end guest at Austin’s Indigo is probably not going to want to share an elevator with a family enjoying their budget break at the Holiday Inn Express.

However, there are compelling budgetary reasons why such combinations make sense, and not just in the US. Hilton will soon open dual branded properties in France and Poland, combining Hamptons with Garden Inn and DoubleTree respectively. Also in Europe, IHG successfully completed a Holiday Inn alongside London’s Olympic Park in 2012, in a block topped with a Staybridge extended stay unit. Both are among IHG’s highest ranked hotels in the UK.

[Andrew Sangster adds]: Dual branding is hardly a new concept. It dates back at least 30 years. But the fact that it is getting prominence reflects the return of development in mature economies.

Other players who are dual branding include Starwood, which is also mixing extended stay and midscale in East London with an Element and Aloft at Tobacco Dock, near the ExCel exhibition centre.

Rezidor has also previously sited Radissons and Park Inns together. But it is arguably Accor who have done most to push the idea of dual, or even triple, branded sites in Europe. This is not surprising as dual branding seems to work most effectively for midscale and below brands and Accor is the dominant player in this segment in Europe.

Multi-branding works because it maximizes the value of the land and the development potential for a site, according to Eric Wright, formerly with HVS but now with IFA Hotel Investments. Building more than one brand on a single, larger site can create more feasible economies of scale and increase potential revenues, he added.

An ideal blend is select service and extended stay as these can be at the same market level while servicing distinct elements of demand, believes Wright. With his new berth at IFA, this is clearly a focus for Wright and an opportunity in the Middle East and beyond.

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