IHG's New CEO on Launching a New Brand and Making Hotels Profitable

25.08.2023 - 13:03 / skift.com / Ihg / Sean Oneill / Elie Maalouf / New Ceo

IHG Hotels & Resorts‘ new CEO Elie Maalouf said his strategy is to make the company’s portfolio as appealing to owners and guests as possible. Maalouf spoke to Skift on Tuesday after his first earnings call as CEO, having taken the helm last month.

Maalouf isn’t a new kid on the block at the Windsor, UK-based hotel operator — whose brands include Holiday Inn, Avid, Kimpton, and Six Senses. He previously led the group’s North American business for 8 years.

“It’s my sixth year on the board, so I’ve been integral to not only our Americas strategy but also our global strategy,” Maalouf said. “I’ve overseen the expansion of our portfolio into all segments, including luxury and lifestyle, our further expansion into the midscale, a global expansion geographically, and the strengthening of our loyalty plan and our enterprise systems and revenue management systems.”

Maalouf touted on Tuesday IHG’s 19th brand — as-yet-unnamed — that will be a conversion brand (rather than new construction) and a midscale offering. (In the world of STR classes, “midscale” hotels sit above the “budget” and “economy” classes and below the “upscale” and “luxury” classes.) IHG said it had “definitive” interest from owners of about 100 properties in the new brand.

“If you were the owner of an existing good quality asset in the midscale, but it didn’t really fit the shape and size and requirements of a Holiday Inn Express, we didn’t have a brand to offer,” Maalouf said. “Now we do.”

Yet IHG’s top boss said the group remained committed to growing its luxury and lifestyle offerings, too.

“Today, luxury and lifestyle globally represents 13% of all IHG rooms and represents 21% of our pipeline, meaning that, if we only stayed there, and opened just that pipeline, without adding any more hotels signed, we would be increasing that luxury lifestyle distribution around the world by 50%,” Maalouf said.

Maalouf cares about the guest experience, but a few analysts credit his rise to the CEO job to his special focus on a key plank in the company’s strategy: differentiating IHG’s owner proposition from its rivals by making its hotels more profitable to create and run.

Maalouf launched new brands and formats in North America with lower hotel development costs and leaner operating models.

The biggest win was Avid, a brand his team launched in 2017. It has been so appealing to developers that it’s now IHG’s second-largest contributor to system size after Holiday Inn Express. Avid has 59 open hotels and 147 in the works. Development costs for the typical 96-room U.S. property are in the $9.6 million to $14 million range. As context, that’s roughly 25% less than the typical midscale limited-service brand, as reported in a survey out this week from HVS,