InterContinental to extend hotel franchise offerings

IHG (InterContinental Hotels Group), one of the world's leading hotel companies, announced on Monday in Beijing that it will extend its franchise offerings in China to its upscale and midscale brands－Crowne Plaza Hotels & Resorts, Holiday Inn and Holiday Inn Resort－further accelerating its growth in China.

The company has signed a strategic partnership with China Travel Service Hong Kong ltd (HK CTS), a State-owned leading tourism company to operate multiple hotels－and about 20 hotels in the pipeline－under a franchise model. Among those, IHG has signed the Holiday Inn Beijing Lido on a franchise contract. The hotel will be rebranded from HK CTS Hotels' Metropark Lido Hotel Beijing in late 2018.

IHG's existing Crowne Plaza Beijing Lido hotel will transfer from a managed to a franchise contract in early 2018. Both properties will be managed by Kew Green, a wholly owned subsidiary of HK CTS Hotels and one of IHG's largest partners in Europe. IHG has also granted a franchise license to another long-term partner in the country, Shanghai China Coal Mansion Co Ltd, for its existing Holiday Inn Shanghai Pudong property. The hotel will transfer from a managed to a franchise contract in early 2018.

The move is the follow-up to the hotelier's previous launch of a "Franchise Plus" model for the country in May 2016.

"Franchise Plus" is tailored specifically for Holiday Inn Express, IHG's mid-ranged hotel brand. It has helped drive accelerated growth for the brand, with 68 signings since launch, and six hotels are already open. The total number of Holiday Inn Express properties in China is 95, with a further 134 hotels in the pipeline, including 62 that are franchised.

Jolyon Bulley, chief executive of IHG Greater China, said: "Based on the maturity of the industry and sophistication of Chinese owners, we believe that now is the right time to expand our franchise model. This will help us accelerate the growth of our brands, and will bring opportunities to access untapped markets, working closely with owners."

In China, IHG currently operates 316 hotels, with 285 in the pipeline. IHG is one of the largest franchisers in the hotel industry, with more than 80 percent of its nearly 5,300 hotels around the globe operating under franchise models.

Bulley said the group will grow the franchise business in China, working with established strategic partners who have proven track records of superior hotel management and operations experience.

Zhao Huanyan, senior economist at Huamei Hotel Consulting, said the franchised model will offer a better financial returns for hotel management companies.