InterContinental Hotels Group (IHG®)
Click
here to link to Intercontinental Hotels Group’s detailed company profile
With 7 hotel brands, over 130 million stays every year, more than 666,000 rooms and over 4,500 hotels across 100 countries, InterContinental Hotels Group is the world’s largest hotel company (by number of rooms). The highly recognized brands in the IHG family are: InterContinental® Hotels & Resorts, Crowne Plaza®, Hotel Indigo®, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®. The international hotel company is committed to create “Great Hotels Guests Love” by providing outstanding services.
IHG’s portfolio covers everything from luxurious and upscale to reliable and economy hotels, fulfilling the needs of different market segments. This diverse portfolio allows for flexibility in responding to most types of hotel development opportunities The company’s Global Development Team is there to help franchisees choose the right hotel brand and maximize the potential of a particular site. IHG manages the world’s largest hotel loyalty program, Priority Club® Rewards, with 61 million members. The global lodging company offers hotel owners a competitive advantage through their brand affiliation for its ability to drive consumer demand and provide extensive operations support.
| |
Operating Units |
12/31/2007 |
12/31/2008 |
12/31/2009 |
|---|
| | Franchised | 2,603 | 2,750 | 2,923 |
| | % Change | -- | 5.6% | 6.3% |
| | Company-Owned | 9 | 9 | 10 |
| | % Change | -- | 0.0% | 11.1% |
| | Total | 2,612 | 2,759 | 2,933 |
| | % Change | -- | 5.6% | 6.3% |
| | Franchised as % of Total | 99.66% | 99.67% | 99.66% |
*Chart represents all IHG hotel brands.
Investment Required
The application fee for a Holiday Inn franchise is $500 per room with a $50,000 minimum. The minimum will vary depending on the IHG brand franchised. Franchise Agreements are entered into with Holiday Hospitality Franchising, Inc., a member of the InterContinental Hotels Group.
IHG provides the following range of investments required to open a Holiday Inn franchise. The Holiday Inn brand has the largest representation in terms of units of franchises among all IHG hotel brands. The range assumes that all items are paid for in cash. To the extent that you choose to finance any of these expense items, your front-end investment could be substantially reduced. The following figures refer to a 100-room, 4-story Holiday Inn hotel.
| |
Item | Established Low Range | Established High Range |
| | Franchise Fee | $50,000 | $50,000 |
| | Property Improvement Plan (PIP) Fee | $2,500 | $5,000 |
| | Building | $5,300,000 | $7,600,000 |
| | Furniture, Fixtures and Equipment | $1,100,000 | $1,550,000 |
| | Initial Inventory | $100,000 | $200,000 |
| | Signage | $50,000 | $250,000 |
| | PMS Equipment, Software, Installation and Training | $60,000 | $75,000 |
| | Market Feasibility Study | $15,000 | $30,000 |
| | New Hotel Opening Services and Training | $5,000 | $5,000 |
| | Initial Certification Training Program | $1,095 | $7,500 |
| | Merlin Communication Set-up | $25 | $35 |
| | Licenses and Permits, Prepaid Expenses | $2,500 | $15,000 |
| | Professional Fees | $100,000 | $250,000 |
| | Security Deposits | $2,500 | $15,000 |
| | Insurance | $75,000 | $100,000 |
| | Kem’s Restaurant Training | $5,000 | $5,000 |
| | Best-4-Breakfast Program | $900 | $900 |
| | Additional Funds and Prepaid Expenses (3 months) | $150,000 | $275,000 |
| | Total Investment |
$7,036,270 |
$10,453,935 |
*Chart represents fees for a typical Holiday Inn brand hotel.
On-going Expenses
IHG franchisees pay a royalty fee equal to 5% of Gross Rooms Revenues (6% for Holiday Inn Express) and a services fee ranging from 2.5-3.5% of the preceding month’s GRR. Other on-going fees include special marketing contributions for the frequency program, capital reserve charges and a monthly technology fee per room.
What You Get–Training and Support
IHG offers continual support to help maximize revenues through efficient operations for all brands. IHG consistently addresses owners’ needs while adding bottom-line value.
- Pre-Opening Training: Initial training for hotel general managers and other personnel is held at your hotel, IHG’s headquarters in Atlanta, Georgia, or a designated metropolitan location. General managers receive training on hotel operation that is unique to the IHG system.
- Hotel Opening Process – IHG supports franchisees every step of the way. From planning to grand opening, the IHG OnBoard™ Program assists owners and franchisees through the entire hotel opening process.
- Technical Assistance – IHG recognizes the importance of superior asset management in maximizing hotel returns, including the comfort and safety of guests and employees. To address this, IHG leverages the collective experience of a global team of architects, designers, engineers and technology experts to ensure that hotels set the benchmarks for the industry.
- Training – IHG offers training and retention programs to assist IHG hotels in attracting loyal employees whose individual drive and talents take customer service to the next level.
- Revenue Maximization – With IHG’s advanced reservations system and efficient revenue optimization programs, each hotel is fully equipped to maximize profitability. Since hotels no longer need a full reservations team, owners can use staff for other duties. This keeps hotel staff numbers down while owners (and customers!) still enjoy a 24-hour reservations system.
- Driving Consumer Demand – IHG drives consumer demand through an integrated system that markets each brand individually through a myriad of channels. IHG global resources and proprietary services can be leveraged into unmatched value and flexibility delivering customizable management services and cutting-edge competitive strategies to deliver more reservations to each hotel.
- IAHI, The Owners’ Association - IAHI is the most established and influential franchisee association in the industry. As the unified voice of IHG owners worldwide, IAHI helps keep ownership concerns at the forefront of your business.
Territory
IHG does not grant exclusive territories.
Note: The tables and information regarding the number of operating units, investment required, on-going expenses, training and territory grants were taken from the company’s 2010 FDD. Upon receipt of the 2011 FDDs, we will provide new and updated write-ups that will reflect more current information. The 2011 write-ups will be incorporated into the 2012 Edition of Bond’s Hottest New Franchises publication.
|
