InterContinental Hotels Group fast-tracks India expansion with 14 hotels

In a country where building a new hotel could take over four years, a flag change cuts the gestation period to a few months. British hospitality firm Intercontinental Hotels Group (IHG) has fast-tracked its growth plans in India by making the single biggest flag change (rebranding a hotel taken over from a rival brand) in the domestic hospitality sector, a move that will expand its room strength by 50 per cent to 9,000 in just about a year.

SAMHI, the Indian hospitality firm with multiple assets, decided to partner with IHG to convert its 14 hotels into the Holiday Inn Express brand in November. These hotels were earlier branded as Formule 1, a budget brand of French hospitality major Accor. IHG inaugurated the first of these 14 hotels in Gurgaon last week.

ALSO READ: Hotel tariffs lag the demand boom: Getting clients to pay more a challenge

“It did not take us that long to sign the partnership with SAMHI. We knew this was available, our brand could be a great fit for it and SAMHI knew the brand well though this was the first time they worked with us. The brand was a perfect fit for them,” Pascal Gauvin, managing director, India, Middle East and Africa, IHG told Business Standard.

When you rebrand an existing hotel you have some challenges, said Gauvin. “The existing room and set-up need a complete makeover. But we love to do this transformation. In the case of Holiday Inn Express, we were very demanding with SAMHI to ensure that the hotel truly reflects our brand,” he added.

Both the companies’ teams spend a lot of time on the paper to get the design right, manage the space, plan layout of the public area with the brand and guest in mind. All the hotels had to be closed down completely for a full renovation, running into 5-6 months on an average. “As we speak, 10 hotels are closed down. It means no revenue for the company. So, besides the investment in transformation, there is this investment in terms of loss of revenue. It was demanding but that’s how we wanted to work on this. A lot of times we debated but managed to come to a conclusion,” said Gauvin, who oversees operations of 132 hotels for IHG in India, the Middle East and Africa, from his Dubai office. We will have 14 hotels up and running in a very shortly, he added.

ALSO READ: Following in AirBnb's footsteps, high-end hotels enter home-sharing market

“This will make a massive difference. Sometimes, between the signing and hotel opening, you may have a gap of 3-4 years. Lot of permissions, approvals and licences are needed”, said Gauvin.

When all these 14 Holiday Inn Express will be operational within a year, IHG will have 20 hotels in India under this mid-scale brand. The company’s total number of hotels is expected to reach 44-45 once these are operational. Besides this, a mid-scale brand, IHG runs hotels under brands like Crowne Plaza and Inter Continental in the country.

Gauvin said the company has 57 hotels in the pipeline in India and all of these are set to be operational in the next 2-3 years. “We believe in the next 3-5 years, we should have 150 hotels including operational and pipeline properties. We are on track to get to that number”.