IHG Cuts Ties with 61 Hotels
IHG Hotels and Resorts is cutting ties with some of the lowest performing properties in its portfolio. During the last quarter, IHG removed 9,500 hotel rooms, or 61 hotels, from its system. Roughly half of that number was compromised by Holiday Inn and Crowne Plaza hotels. On the other hand, IHG only opened 7,300 rooms, or 56 hotels, last quarter.
Keith Barr, the UK-based hotel company’s CEO, said earlier this year that the company would target 200 underperforming hotels to remove from its network to improve customer service and better position for growth coming out of the pandemic, Skift reports.
The rate of Holiday Inn and Crowne Plaza are double of the company’s other brands. But both of them remain important to IHG. The hotel chain expects that by kicking out properties with lower customer service ratings, it will boost brand profiles, especially at a time when IHG wants to sign more franchise deals with owners of existing hotels.
The IHG CEO noted in February that roughly 60% of the hotels across the Middle East and Southeast Asia are independent, which presents a major opportunity to add some of this properties to its company. Holiday Inn and Crowne Plaza are popular brands in these markets. IHG launched Holiday Inn Express in China five years ago and already has deals to add 300 new hotels.
“Owners understand what we’re trying to do,” Barr said on an investor call. “But there are further conversations to be had before I will be able to give you a meaningful level as to what proportion may stay and what proportion may go.”