You head up the Southern Europe region for the IHG Group. What is your outlook for 2025?
Eric Viale - We look forward to the year ahead with great confidence, buoyed by a strong first half of 2024, marked by around +4 % growth in revenue per room for IHG in Europe compared to the same period last year. Initial trends in bookings over 2025, as well as forecasts from various research firms, point to the possibility of another year of growthacross all segments.
The post-pandemic recovery was driven by leisure customers, driven by the desire to travel after such a complicated period. Its growth, which was very strong at one time, now seems to be slowing down. Do business customers now represent a new growth driver for the hotel industry?
E. V. - Admittedly, the growth in leisure customers is no longer as strong, or as surprising, as it has been in recent years. But there is not necessarily a drop in volume or sales in this segment. Instead, we are now in a a period of normalisation. In this context, business travellers are acting as a growth relay on a solid base of leisure travellers. This segment has returned more gradually, but also more rapidly in terms of individual business travellers, who have been back at 2019 levels for some time. On the other hand, the meetings segment has been slow to return to its pre-Covid performance.
Yet we often hear hoteliers say that MICE is in great shape, that small meetings are driving business. Do you think this is really true?
E. V. - Taken as a whole, MICE is still a little behind where my region, Southern Europe, is concerned. This is mainly because very large meetings have not in the same dimensions as before. We have them, but probably with fewer participants. On the other hand, a major meeting has to be booked well in advance. But the outlook is encouraging for 2025 and 2026, when some major events have already been confirmed. Looking at the end of 2024 and the beginning of 2025, we remain confident that the year will see this segment return to pre-Covid levels.
What is the IHG Group's strategy for making itself more attractive to business customers?
E. V. - There are several areas on which we have worked hard, particularly sustainable development. Nine out of ten major accounts now ask to be informed of their eco-responsible commitments in their invitations to tender. Since IHG launched its Journey to Tomorrow" CSR programmeWe have established quantified targets for reducing our carbon footprint and set new standards for our hotels. We are gradually introducing new energy conservation measures. We have also launched a pioneering 'low carbon' hotel in Spain, designed from the outset to drastically limit its footprint. In parallel, we're speeding up certification. Today, 100% of the establishments we manage in Southern Europe are recognised by international labels. In addition, at a time when key accounts are concerned about the impact of their meetings, we have launched the Meeting for Good programme, for sustainable events that include the absence of single-use plastics and a community support dimension.
If all calls for tender include CSR criteria, isn't price still the main argument at the end of the day?
E. V. - I think that price is still an important criterion. But, at comparable rates, organisers will no doubt favour hotels that have taken eco-responsible initiatives. Especially as CSR criteria will putting on more and more weight.. Companies will have to justify their choices. Beyond the corporate target, it's important that each of our customers is aware of the impact of their stay. Journey to Tomorrow, our ten-year plan, is extremely well articulated, with efforts to reduce our carbon footprint measurable every month and every year, a target of zero single-use plastic by the end of 2025, and a section on inclusion, diversity and community support. We are making progress on all these issues.
What other initiatives have you launched for business customers?
E. V. - We've taken several. As part of the launch of our loyalty programme IHG One RewardsFor example, we have redesigned and relaunched the IHG Business Rewards programme for meeting and seminar organisers. We have also created the IHG B2B Portal, which helps companies manage their reservations and events. As part of our strategy dedicated to the business segment, we have also accelerated our IHG Business Edge programme, for small and medium-sized businesses and offers them booking solutions and access to our hotels at special rates. This programme already existed, but we are stepping up its promotion, which is different from before.
With Covid, have the major hotel groups rediscovered the virtues of SMEs?
E. V. - Major international accounts have the potential for overnight stays in any hotel in the world, which is why they are managed by our sales forces. This is essential if we are to cover all our territories and the diversity of our brands. On the other hand, in our model, the small or medium-sized local business is more the responsibility of the hotel, to animate its primary zone. With IHG Business Edge, we wanted to support them, so that they can not only rely on their local market, but also opening up to other sources of customers. This is achieved by providing easy-to-implement technological solutions that give small businesses access to a professional platform for managing their bookings and travel expenses.
Let's move on to your development. What is IHG's strategy in your region, which covers France as well as the whole of Southern Europe and beyond?
E. V. - We now have nearly 260 hotels open, in addition to 113 projects signed. This shows the dynamics This is the region as it is currently defined, i.e. including the Balkans, Turkey and the former Soviet republics since the closure of our Moscow office. Our development strategy revolves around a number of priority markets, such as France, Spain and Portugal, where we are experiencing strong growth and which should soon reach the same level of presence as in France. Italy and Turkey are other major markets where we see the biggest growth opportunities. But we also have a nice pipeline in new destinations for InterContinental, with installations planned in capitals like Tirana, Belgrade and Podgorica. This historic brand has more than 200 hotels around the world, but is expecting to add another hundred or so, with a number of attractive openings in Southern Europe.
In fact, you have just added a new InterContinental in Chantilly. What are you doing to strengthen your presence in France?
E. V. - The recent opening of the InterContinental Chantilly proves it: France remains a priority for IHG. With 70 hotels open and 12 more to come, this is our third largest market in Europe after the UK and Germany. We have three main strategic objectives in this market: firstly, to consolidate our leading position in the luxury segment, in particular with our fine collection of InterContinental in historic buildings in Bordeaux, Marseille, Lyon and Paris. In this context, the recently renovated Chantilly hotel is opening a new chapter, with its offering focused on short breaks and seminars in the countryside, to extend the brand's positioning outside the major cities. Since last year, we have also had our first ultra-luxury flagship in France, the Regent Carlton Cannes, which has performed beyond our expectations. And then there's our more casual luxury brand, Kimpton, which continues to grow and is already present in Paris.
Do you have any other plans for Kimpton in France?
E. V. - Not at the moment, but we're in discussions about a number of projects that would make perfect Kimptons. The brand has found its positioning and is very much in tune with the expectations of investors and customers alike. The development of the brand has accelerated significantly in Southern Europe with hotels opening in Barcelona and Mallorca, and Kimpton hotels soon to open in Marbella, Lisbon and the Algarve, as well as in Taormina and Crete.
What about the Vignette Collection? Could it too make its debut in France?
E. V. - This is our second strategic pillar, namely our brands focused on conversion. And there's a lot behind this idea. Whether it's a new use for existing buildings, such as office blocks, for example, or a change of brand name, or independent hotels seeking the support of a recognised brand to raise their profile internationally and strengthen their distribution. Conversion accounts for 40% of our signatures todayIn the past, the majority of properties were newly built. So we needed brands that were designed from the outset to facilitate this conversion, and that met the expectations of owners and travellers alike. We are well equipped today with Vignette Collection in the luxury segment, Voco in the top end and now Garner in the mid-range segment.
This brand is already well established in Germany thanks to your franchise agreement with Novum Hospitality. Could we see it appear in France soon?
E. V. - Having an accelerator that gives brand visibility and then deploy it was part of our strategy. We also have a Garner in the UK, and France is a market where we naturally intend to develop it. The profile of many hotels lends itself to this brand. It's a brand we really believe in.
At the same time, are your historic Holiday Inn and Holiday inn Express brands still IHG's strong points?
E. V. - Even though we are seeing a real acceleration in luxury goods, which account for around 37% of our signatures, these brands remain a fundamental pillar in strengthening our leadership position. They continue to grow in France and Southern Europe in general, by opening up growth prospects in cities where we are not yet present. In France, we see great opportunities to continue our coverage of the country with Holiday Inn Express, but also quite a few opportunities for Holiday Inn.
What is your strategy for ensuring that these well-established brands continue to appeal to travellers?
E. V. - The emphasis has been on their evolution over the last three or four years. At both of them, we have undertaken a transformation of the rooms and public areas with the aim of keeping them relevant for business travellers, but also attractive for leisure customers. Today, in addition to new-generation rooms, 100% of our Holiday Inns have been converted to open lobby conceptIn other words, public spaces with a more modern, lifestyle feel. At Holiday Inn Express, the roll-out of a new generation of rooms is underway, and from next year the brand will be offering redesigned public areas, with this new concept currently being finalised. These are major structural repositioning projects.
What about Crowne Plaza? This predominantly business brand seems to be losing ground somewhat. Is this your observation?
E. V. - It depends on the filter you use, because in certain areas such as the Balkans or Turkey, we have opened some very fine hotels in recent years. However, it's true that we had undertaken a whole repositioning project for Crowne Plaza just before the pandemic, for example with the unveiling of a new approach to public spaces in the Crowne Plaza Paris République. A new lobby adapted to different uses throughout the day, between relaxation and coworking, while a new generation of rooms also went with this concept. But because of Covid, we weren't able to put everything in place immediately. Which, in a way, also helped us to refine this development taking into account the arrival of a larger leisure customer base. The repositioning of the brand will begin in 2025, with a new visual identity. You'll be hearing a lot more about Crowne Plaza this year.
