IHG plans aggressive growth in Canada

Two new Crowne Plazas are part of IHG's aggressive plans to grow its Canadian portfolio.

TORONTO—InterContinental Hotels Group is opening a hotel a day around the world, and the company has 58 hotels in its Canadian pipeline.  That means the company intends to grow its Canadian portfolio by 45 per cent. IHG currently has 139 Canadian hotels with 21,674 rooms.

And while the economic situation will delay projects that have not yet broken ground, those projects that are in the ground will go ahead, Gopal Rao, the company’s Canadian regional vice president, sales & marketing, told CLN in a meeting late last year.

“Most of our development is with existing owners.  They have done this before and are in a better position to get financing,” he said, adding that the credit market is very difficult at this time, and that no one is immune from the economic situation except Wal-Mart and McDonalds.

The trend by consumers to trade down their hotel accommodation is benefitting IHG, Rao said.  “During times like these, stronger brands are more powerful than weaker brands.”
Holiday Inn Express is the fastest growing mid-market chain without food and beverage in Canada and internationally, he added. The company has upgraded Holiday Inn Express’s free breakfast, with the ExpressStart breakfast bar and its signature cinnamon buns.

Both Holiday Inn and Holiday Inn Express are undergoing a complete redesign, with the goal of having every North American property redesigned by January 31, 2010.  The Canadian properties in the pipeline will be among the first in the world to showcase the new sign, which is the seal of approval that a hotel exemplifies the standards of the relaunch program.  First announced in 2007, the relaunch program was established to create a more contemporary brand image, increase quality and drive consistency in the brand’s nearly 3,200 hotels around the world.

“The relaunch is not just a new sign,” Rao said.  “It involves a lot of renovations before they get to put up the new sign. There’s some attrition when it comes to taking initiatives on the renovation—but [the requirements] are not tough if [operators] think about what the brand is going to do.”

Canada currently has 119 Holiday Inn and Holiday Inn Express hotels in Canada, with a total of 17,254 rooms.  Plans call for 47 more hotels with a total of 4,860 rooms.  Of these, 10 will be Holiday Inns and 37 will be Holiday Inn Express.

“Our thrust and energy and force is in Holiday Inn and Holiday Inn Express – and Holiday Inn Express is really seeing the bulk of the growth.  The reason is simple.  Both stakeholders – developer/owners and customers – win.  Developer/owners find it simple, they get it, the ROI is clear, not complicated.  Guests know exactly what to expect, and they know they don’t pay for things they don’t use.

Fortunately Holiday Inn Express is only 17 years old. The majority of Holiday Inn Expresses are new builds, so that company doesn’t have legacy problems. Holiday Inn is an older brand. “That said, we continue to believe that Holiday Inn has the most potential to grow. Every three seconds, someone checks into a Holiday Inn worldwide,” Rao added.
While the big growth for Holiday Inn and Holiday Inn Express is in the west, particularly Saskatchewan and Alberta, “that’s not to say we won’t expand in Ontario as well,” said Rao.  “There are opportunities for spectacular growth.”

InterContinental: InterContinental is the company’s big city, downtown brand, suitable for places such as Vancouver, Edmonton and Calgary.  There are currently three InterContinental hotels, two in Toronto and one in Montreal.

Crowne Plaza: Crowne Plaza attracts the same guests as the Marriotts and Hiltons of the world.  IHG is looking at a second Crowne Plaza, but the deal has not been signed.  Normally, Crowne Plazas are at the city centre or the airport, not in secondary or tertiary markets.  IHG currently has eight Crowne Plaza hotels, including one at Toronto Airport, which held its official opening ceremony recently. Crowne Plazas in Hamilton and Niagara Falls also opened in 2008.  There are two more in the pipeline, with a total of 524 rooms.

Hotel Indigo: There is just one Canadian Hotel Indigo, located in Ottawa, but Rao says one 120-room hotel will be coming to the Toronto area very soon.

Staybridge Suites: The 142nd Staybridge in the world recently opened.  This is an upscale, extended-stay brand, which benefits from the IHG reservation platform.  All the Canadian Staybridges are brand new.  Staybridge topped the JD Power list in its segment.  Canada has seven Staybridges. The latest recently opened at Highway 10 and Derry Road, northwest of Toronto. Five more hotels with a total of 536 rooms are in the pipeline.

Candlewood Suites: Candlewood is another extended stay brand, and IHG is planning two more in the near future. The Candlewood Suites in Montreal has 143 rooms.  It was the brand’s first hotel outside of the U.S., and two hotels with a total of 154 rooms are in the pipeline.