Changes are brewing in the hotel trajectory, and it will impact everything from how you achieve loyalty status to the types of hotels that are coming to the United States.
The Americas Inn Investment Summit, one of the hotel industry’s largest conferences, takes place every year just before the big companies start reporting on their performance for the previous year.
This year, the event in Los Angeles was notable for its overwhelming optimism despite all the talk about economic uncertainty. If there’s a recession going on, you can’t tell from the event spaces at ALIS.
Momentum seems to be building around the idea that US hotels will perform better than pre-pandemic levels this year (as reported by CBRE). So in addition to the interviews with the CEOs of Marriott and AccorTPG spoke with leaders in the hospitality industry to understand what is available to hotels.
Here are some of our key lessons.
IHG reaffirms itself on the table
It’s easy for travelers to focus on Marriott and Hilton because of their size and variety of options. Hyatt is another major player thanks to its rapid growth in luxury hotels and leisure in recent years. I’m also curious about Paris-based Accor’s plan to spur growth in the US
However, we can’t offer a discount to what is arguably the most popular hotel brand today: IHG Hotels & Resorts.
Most recognizable for the Holiday Inn family of brands, IHG has made a number of moves in recent years to enhance its lifestyle, luxury and ultra-luxury offerings, and complete the network. its brand. Along with overhauling the loyalty program, IHG acquired brands like Regent and Six Senses while organically growing other brands like Vignette Collection and Voco.
It even infiltrates all-inclusive resort sector last year. I’ve enjoyed seeing some of the newer IHG properties and partners while traveling with Diamond Ambassador status over the past three months (more on that to come in the next few weeks). This includes stays at InterContinental hotels in Paris and Los Angeles as well as hotels in Germany and the south of France that are part of the IHG cooperates with Mr. and Mrs. Smith.
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There’s no reason to think the growth is stopping there. IHG’s push into the premium segment seems to exclude the US as brands like Six Senses and Regent mainly operate in other countries. But that is also changing. IHG announced this month that it will bring the Six Senses brand to California alongside the Six Senses Napa Valley, which is slated to open in 2026. That news comes shortly after IHG announced plans for the outpost. Vignette Collection’s U.S. first, The Gwendolyn, is scheduled to open in Oregon’s Willamette Valley in 2025.
IHG has an impressive line of InterContinental products in the US, but is it starting too far when it comes to ultra-luxury?
Elie Maalouf, CEO of IHG Americas, told TPG: “If you look at the ultra-luxury brands, they tend to develop their reputation and develop their brand first outside the US. “Then they came to America”
There are 20 Six Senses properties currently open and 34 more in development, he added. Maalouf also noted that a number of other properties will arrive in the United States after Napa.
And what about that? cancel the agreement for a Six Senses in New York City?
“We will be in New York at some point. We’re not worried about that,” Maalouf said. “We have a lot of interest from website owners and developers in New York. We’re going to have a Six Senses in New York. We can be very selective about where, when and how we operate.”
New look of loyalty program
Omni . Hotel & Resort isn’t the biggest player in the US hotel orbit, but the company’s potential loyalty program overhaul could signal the direction of the industry as a whole. Company President Peter Strebel told TPG during ALIS that Omni is moving toward a program based on total spend rather than number of nights in a room. Expect to learn more in light of the expected overall rebranding later this spring.
“Our loyal customers are not traditional business travelers,” says Strebel. “They are traveling families and people traveling for golf or spas and girlfriends weekends. So we’re really going to steer the loyalty program towards more entertaining customers.”
Strebel emphasizes that it is different from competitors and loyalty programs aimed at frequent business travelers at the hotel; however, it is not impossible to think that large hotel groups will pursue something similar.
After all, business travel may be making a comeback, but leisure travel continues to dominate the travel sector.
Battle of bargains
Sure, this summer may not be as packed with hotel deals as expected, but it looks like more major loyalty programs are coming to the affordable hotel segment.
Hotel companies with more affordable brands like Wyndham — owner of brands like La Quinta and Microtel — and Choice Hotels — owner of services like Quality Inn and EconoLodge — may have reason to lose sleep. For years, big companies like Marriott and Hilton have shied away from more budget-friendly offerings, but now it seems the biggest hotel companies are rethinking this type of travel.
Hilton launches Sparkwhich it bills as a premium economy service and it plans to open its first batch of hotels later this year. Marriott takes over Mexico-based City Express Analysts expect the brand’s global expansion to target affordable mid-range hotels.
Bring what? There are a few reasons here. Some say it’s because brands tend to charge more as they mature, so they need to fill the gap with another affordable option. Others say it’s a good way to target online booking platforms like Expedia and Hotwire, which often lower the prices of brands. Either way, there will be a more affordable entry point to earning nights on Hilton Honors and Marriott Bonvoy in the years to come.
Do more with the brands you have
The era of hotels adding more brands is not over yet. Notice of Accor .’s Handwritten Collection and Spark came shortly before ALIS. While we can’t reveal details yet, TPG spoke with hotel executives from multiple companies about many other new brands that are expected to launch in the coming months and years.
But there is also evidence that hotel companies are reviewing their existing branded product lines to introduce new products.
Basically, do more with what you have.
This is evident with things like Marriott’s Ritz-Carlton Yacht Collection as well as Accor’s expansion of the system. Oriental Express the brand extends beyond the trains (although they are coming soon) into hotels and own super yacht. Older brand extensions include hotel-branded residential developments, where brands like St. Regis or Four Seasons manages condominium projects. Even that is taking its toll, as younger brands like Virgin look to expand into housing.
Virgin’s growth prospects
Speaking of Virgin Hotel, TPG doesn’t have the best experience at The Virgin of Edinburgh when we checked in last September, as the hotel didn’t seem quite ready to receive guests.
At ALIS, we met Virgin Hotels CEO James Bermingham, who happily took the time one afternoon for an interview to discuss what’s next for the brand. Bermingham also told us (with a smile) that it might be possible to wait until a hotel goes through a soft opening before checking in next time.
The company recently restructured. Virgin Hotels and Virgin Limited Edition — a private collection of resorts, hotels and islands owned by Sir Richard Branson (including his Necker Island) across Europe, Africa and the Caribbean -calf — now incorporated under the Virgin Hotels Collection brand. Hotels opening soon include hotels in New York City and Glasgow while other hotels are under development in Miami and Denver.
One thing that we’ve been drawn to by the hotel orbit is the partnership between the biggest corporations and smaller, more appealing brands. Accor partnered with Ennismore in the lifestyle division. Marriott launches version with Studio 54 co-founder Ian Schrager. Even Virgin has a resort in Las Vegas in partnership with Hilton under the soft brand Curio Collection.
The large hotel parent company delivers brand awareness, booking infrastructure, and customer loyalty network. Meanwhile, the smaller brand gives the property a more unique identity than would be expected of the big chains.
Bermingham has previously told me that this is partly because the Vegas hotel is much larger than a typical Virgin hotel, but has not ruled out the possibility of such additional partnerships in the future. Virgin may be exactly the brand that some of the larger companies need to win over younger customers.
“If we were to do something like Atlantic City or a major casino destination in the Caribbean or Central America, I would seriously consider doing it again because it works so well.” he talks about Las Vegas’ partnership with Hilton.
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