IHG Hotels & Resorts recently announced the signing of 24 new hotel projects in Greater China during its owner roadshow in Beijing. These signings mark IHG’s expansion across diverse regions in China, including multiple IHG brands such as Holiday Inn and EVEN Hotels, with a majority of the projects being for the Holiday Inn Express brand. The franchise model has been instrumental in IHG’s rapid growth in the region, with over 500 opening and pipeline hotels now under the Holiday Inn Express brand in China.
IHG’s franchise model, particularly tailored for the Greater China region, ensures balanced development and meets diverse stakeholder needs. This model includes comprehensive support from IHG, such as the appointment of a General Manager, to maintain brand standards, optimize support tools, and enhance operational efficiency. By the end of December 31, 2023, nearly 40% of IHG’s hotels in the region were operating under the franchise model, with over half of the hotels in the pipeline also adopting this approach.
Hilton has also announced plans to extend its franchise model in Greater China, with the inclusion of the DoubleTree by Hilton brand. By October 2023, the company had unveiled 19 new franchise projects for its Hilton Garden Inn and DoubleTree by Hilton brands in the region. IHG aims to introduce new room designs and cost structures for the Holiday Inn brand to attract more investors. With a diverse portfolio featuring 12 of its 19 global brands in Greater China, IHG currently has over 1,200 openings or projects underway in the region.
The Chinese hotel market is expected to reach $166 billion by 2028, with a strong presence of mid-range hotels catering to business travelers and budget-conscious tourists. IHG provided insights into emerging investment trends in the hotel industry during its owner roadshow, focusing on the upper midscale segment. Kent Sun, chief development officer of IHG Greater China, highlighted the appeal of this segment due to its cost-effectiveness, adaptability, and resonance with younger consumer demographics. The government’s emphasis on tourism as a catalyst for economic recovery has also stimulated hotel investment and intensified competition in the upper midscale segment.
Investors are increasingly focusing on IHG’s upper midscale brands, recognizing the group’s strong competitive position in this sector. The market demand for quality offerings aligns with IHG’s expansion of upper midscale brands in Greater China. With the franchise model driving rapid growth and scalability, IHG’s strategic approach to development in the region has been successful in meeting stakeholder needs and expanding its presence in diverse regions in China. The hotel industry in China continues to thrive, with IHG and other brands leveraging franchise models to capitalize on the high demand for accommodations in the market.
