IHG and Hilton Execs Mull Over Adding Soft Brands

InterContinental Hotels Group and Hilton Worldwide are looking to expand their portfolio of brands.

IHG, one of the largest hotel companies in the world, is considering introducing a soft collection and adding something new in the luxury segment, IHG CFO Paul Edgecliffe-Johnson said during the company’s third-quarter 2017 earnings conference call.

“Clearly some of our competitors have had success with that. Now with [new brand] Avid launched and traveling well, and Holiday Inn franchising in China doing well, there are some areas we’ll look at, and that is one,” he said. “And something in the luxury space, too. There is space for the group to do something else in luxury.”

The U.K.-based hotel company already is expanding its 12 brands – including Holiday Inn and Crowne Plaza Hotels – with the addition of a new midscale brand, Avid, it announced in June.

Hilton, meanwhile, is in the midst of developing four new brands.

Hilton CEO Christopher Nassetta said on the company’s third-quarter earnings call the company is working on a Hilton Plus brand, a slightly more upscale version of the Hilton brand, an urban micro-room brand, a luxury soft brand collection, and a luxury lifestyle brand. Nassetta said he expects two or three of those brands to launch as soon as 2018.

The proposed luxury collection will fill the tier above Hilton’s Curio Collection and the Tapestry Collection, which consist of three- and four-star properties.

“[Hilton] just launched Tapestry this year at our first opening [in Syracuse, N.Y.]. We’re still cranking up with Curio and even Home2, which is doing incredibly well. We’ve had five new brands over a relatively short period of time. So we want to make sure, I say pretty consistently, that we give them a proper birth,” Nassetta added.

A majority of the leading hotel chains operate collection brands, including the Ascend Hotel Collection by Choice Hotels and the Unbound by Hyatt. Wyndham Hotel Group announced earlier this year it is launching Trademark Hotel Collection, a soft brand of upper-midscale independent hotels; while Marriott International said by 2019 it plans to increase The Luxury Collection, Autograph Collection Hotels, and Tribute Portfolio by nearly 50 percent. 

Best Western, too, launched its third soft brand this week with the BW Signature Collection. The brand said it expects 100 hotels to be in the BW Signature Collection pipeline by 2020.

Best Western now offers soft brand options in most chain scale segment, upper economy and midscale with the SureStay, upper midscale with BW Signature Collection, and upscale and upper upscale BW Premier Collection.

“We saw an opportunity here and, based on increasing demand for soft brands from independent hoteliers who are hungry to succeed but maintain their own distinctive identity, we believe we will be successful,” President and CEO of Best Western Hotels & Resorts David Kong said.

The appeal of soft brands lies in the ability for larger chains to offer a “boutique” hotel experience, as many travelers steer away from cookie-cutter options, while independent hoteliers gain access to a global distribution network and loyalty members.

“An increasing number of hotels in North America and overseas are going independent because they want flexibility and freedom from brand requirements, but they are also looking for an alternate source of business, a loyalty program and a robust reservation system,” Kong added.