Riding on the recovery of hotel performance in Asia Pacific, driven largely by domestic demand and increased investments, IHG Hotels & Resorts has accelerated its growth in the region and achieved a major milestone.
The hospitality company has reached 1,012 open hotels in Asia Pacific and has welcomed guests at several new hotels in the past year, IHG said in a statement. With demand for hotel stays projected to surge this year and a robust anticipated long-term growth, the company is poised for success in the market.
The 1,000-plus milestone includes more than 700 properties in Greater China, a “fantastic achievement” for the group, said Rajit Sukumaran, SVP & managing director, East Asia & Pacific, IHG Hotels & Resorts. The company is maximizing their opportunities by investing in their brands, delivering competitive returns for owners and driving growth in all markets, he added.
“We know that people have a fundamental desire to travel and meet in person and, whether it’s for leisure or business, we’re there for them and offer a wonderful selection of hotel brands and experiences for all types of travel. We’re achieving this by maintaining our industry-leading position in the mainstream segment through our Holiday Inn and Holiday Inn Express brands, which make up more than half of IHG’s existing portfolio and half of its pipeline in APAC,” Sukumaran said.
IHG is also investing in its six Luxury & Lifestyle brands, which represent 22% of its global pipeline. This is nearly twice the figure from five years ago. The company has established itself in this segment in the region, with 45% of its global Luxury & Lifestyle pipeline located in Asia Pacific.
The region constitutes roughly 60% of the InterContinental’s global pipeline and hotels under the Six Senses and Regent brands. With several Kimpton and Hotel Indigo brands performing well in the market, Vignette Collection is also resonating well with owners and guests, Sukumaran said.
Conversions play an important role in IHG’s growth, with 36% of the group’s global signings stemming from conversions. IHG’s Asia Pacific brand portfolio will grow in this space, including Garner, the company’s latest midscale conversion brand. Sukumaran said Garner will open three hotels in Osaka, Japan.
In the long term, Asia Pacific is expected to witness a rapid surge in passenger traffic, aided by the recently eased travel arrangements (including visa-waiver agreements between countries, and new flight routes and airlines) which are driving demand for hotel stays in the market.
IHG intends to tap into this rising demand, backed by a pipeline of 705 hotels, across 22 countries under 13 brands, supported by its IHG One Rewards loyalty program.
Hotel construction has been improving in Asia Pacific, with the total hotel construction pipeline, excluding China, rising 4% YOY in Q4 2023 and ending the quarter with a record high 1,977 projects and 402,156 rooms, according to latest data by Lodging Econometrics. Higher-end chain scale projects soared in the region, with luxury, upper upscale, upscale projects and rooms counts touching new highs.
In China, total project counts ended the quarter at an all-time high (for the second time in a row). According to Lodging Econometrics, with a 6% YOY jump in projects and a 2% YOY rise in rooms, the country’s total pipeline ended 2023 at 3,788 projects with 691,772 rooms. Like the rest of Asia Pacific, China’s hotel construction pipeline was mostly dominated by upscale and upper midscale projects, claiming over 50% of the total projects and rooms in the pipeline, touching records in project and rooms counts.
Asia Pacific is also witnessing an improvement in business travel bookings, with the region accounting for the lion’s share of business travel spend and likely to reach $800 billion by 2027. This includes the return of major conferences and events, such as the upcoming World Business Forum in Singapore.
Industry statistics are showing a robust construction pipeline of more than 5,700 projects in the region, with more than 1,200 anticipated to open this year itself in the hospitality sector, said Sukumaran.
“It’s an exciting time for IHG in APAC. The strong performance of our hotels over the past year has strengthened owner appetite for continued investment in the hospitality industry. Overall, we’re looking forward to what we’re going to achieve in APAC over the next decade as we expand our presence in the region’s established and emerging markets.”