IHG CEO Targets Indie Hotels in Tech-Driven Expansion — Exclusive Interview
SHERIDAN, WYOMING – Feb. 10, 2025 – As the president and CEO of IHG Hotels & Resorts, Elie Maalouf is navigating an industry transformed by technology, loyalty programs, and the increasing influence of major brands. In an exclusive interview with Skift at the Americas Lodging Investment Summit (ALIS) in Los Angeles, Maalouf discussed IHG's strategy for attracting independent hotels, the role of technology in gaining a competitive advantage, and the company's growth prospects in markets like Japan.
The Changing Landscape of Hospitality
“There’s always been a mix of local and global in hospitality, but the game has changed,” Maalouf said. “Today, the regional players that want to go further need access to capital, technology, and distribution networks that only global brands can provide.” This shift is driving independent hotels and regional chains to seek the support and resources of established global brands like IHG.
IHG's Strategic Approach to Expansion
IHG is pursuing a franchise-focused expansion model, emphasizing conversions rather than outright acquisitions. This approach allows the company to grow its footprint efficiently while providing independent hotels with the tools and resources they need to thrive. A prime example of this strategy is IHG's April 2024 agreement with Novum Hospitality, a German group that transitioned 119 properties to the IHG system. "We see tremendous opportunity for growth in Europe, where independent hotels and regional chains are realizing that competing in today’s digital landscape is incredibly expensive,” Maalouf explained.
Europe: A Key Market for Growth
Europe represents a significant growth opportunity for global hotel chains like IHG. According to CoStar's STR, only approximately 40% of hotel inventory in Europe is branded, leaving a substantial market share for IHG to capture. The company's focus on conversions, exemplified by the Novum deal, reflects its strategy of partnering with existing independent hotels to expand its presence in this crucial market.
The Power of Technology
Beyond access to global distribution networks, independent hotels are increasingly drawn to the technological advantages offered by global brands. Maalouf highlighted the importance of technology in today's competitive landscape. Novum's decision to join IHG, for instance, wasn't solely about distribution; it was also about gaining access to IHG's advanced technology platforms.
Japan: A Market Ripe for Development
Maalouf also expressed enthusiasm about the potential for hotel development in Japan, particularly in the midscale and luxury segments. He sees significant opportunities for IHG to expand its presence in this market, catering to both domestic and international travelers.
The Novum Hospitality Deal: A Case Study
The agreement with Novum Hospitality serves as a compelling illustration of IHG's strategy. By bringing 119 properties under the IHG umbrella, the company not only expanded its European portfolio but also demonstrated the value proposition it offers to independent hoteliers. This deal underscores the growing trend of independent hotels seeking the resources and support of global brands to navigate the complexities of the modern hospitality industry.
The Future of Independent Hotels
Maalouf's insights suggest a future where independent hotels increasingly partner with global brands to remain competitive. The challenges of digital transformation, coupled with the need for access to capital and distribution networks, are driving more independent hoteliers to consider the benefits of affiliation with established brands like IHG.
Conclusion
IHG's strategy, under the leadership of Elie Maalouf, is focused on leveraging technology and strategic partnerships to expand its global footprint. The company's emphasis on conversions, particularly in markets like Europe, reflects its understanding of the evolving needs of independent hoteliers. As the hospitality industry continues to evolve, IHG is positioning itself as a partner of choice for independent hotels seeking to thrive in a competitive and technologically driven world.