The Caterer interview: Joanna Kurowska, managing director of IHG Hotels & Resorts

19 October 2022 by

The managing director of IHG Hotels & Resorts speaks about opening one new hotel a day and how the company communicates with its franchisees

Are revenue per available room and occupancy continuing to rebound following Covid-19 at IHG Hotels & Resorts?

It has been a great six months for us. The year started well and travel seems to be back after those two uncertain and extraordinary years we have all gone through. Our performance in the Americas is stellar and, closer to home in Europe, the Middle East and Africa, the first half of the year was very, very close to 2019 levels, especially in the second quarter. Here in the UK and in London we're exceeding in the second quarter versus 2019.

Are you concerned about inflationary pressures and the cost of living crisis?

Of course, as with any business we are closely watching what's going on around us and how the macro conditions are changing. We are fully aware of those pressures, including those on the labour market, which again are a well-documented part of the hospitality story in the last few years.

Do you think these pressures will have a considerable impact on consumer behaviour?

The demand for travel is still very strong and we're continuing to open and sign hotels. In the first half of 2022 alone we have opened another 100 hotels and we have signed 200, which is more than one hotel a day. What that tells us is that there is an appetite and desire to travel and to discover the world, and that hasn't stopped regardless of the conditions around us. Having said that, we need to stay grounded in the reality of those cost pressures, as they are affecting our hotels and owners, and as a responsible business partner we are supporting our owners and facing these challenges head on.

How are you finding recruitment? Does the UK stand out as a challenging market?

There has been a lot written about the staff shortage or the ‘great resignation', or any other words the press and media have used to describe the labour market in the past 24 months. But I think the way I would describe it is that the key of our industry – absolutely the core of everything we do – is our care for our people. Any industry, whether it's hospitality or not, needs to prioritise its people and for its teams to be successful. I think we do it well and I'm very proud that we put our people and the culture of inclusivity at our core. We face the same challenges everyone else has described, but for us it is less about dwelling on the challenges that there might be and more about helping others understand and discover what it is to actually work for an industry like hospitality.

Can you tell me more about the people strategies you've put in place to help boost retention?

The strategy is around making sure that our workplace and our culture is diverse and inclusive. There are a lot of chapters on this journey and one of them is the chapter we call wellbeing. Our strategy is to make sure our teams and colleagues know the channels for them to be able to access help and support if their wellbeing is not where it needs to be. We want them to be happy people before they're employees.

Some strategies are focused on increasing the number of women in our industry and in our leadership positions, and we call this programme IHG Rise. Another strategy is about creating opportunities for those in very early days of their careers, which is the IHG Skills Academy. That programme has been in existence for 15 years, so we are building on its legacy and successes.

We also want to have a visible presence, to show the world and our colleagues that we can and we do walk the walk. For example, I, together with many colleagues, took part in the 50th anniversary of Pride in London and we have also sponsored UK Black Pride. All this says we are an employer that wants to create a place of work that is so much more than just a place of work.

How do these strategies filter down to your franchisees?

We have very strong, long-lasting relationships with our franchisees through the owners' association, which is a forum where we discuss performance, challenges and solutions and we also share best practices. We are very proud of the closeness, proximity and trust this forum gives us, and if we talk, for example, about our policies related to our people and our team, everything we try and do here at IHG is shared with them and we hope that it serves as an inspiration.

Can you tell me about IHG's expansion plans?

As I mentioned, we have signed 200 hotels in the first six months of this year, which means we have exceeded 6,000 hotels globally.

All our brands, from Holiday Inn and Holiday Inn Express up to Six Senses, our most luxury brand, have their space here in this country. And we have plans for all of those as to where we would like to see them grow. The new trend we have noticed in the UK and more broadly is a trend towards conversions. However, following the pandemic, and with the cost of construction and the cost of acquisition of new hotels, those opportunities of converging existing buildings are becoming more frequent.

All of our UK brands are potentially conversion brands, though we do have some that suit this part of the market better. Voco, our upscale brand, is making headway here in the UK or globally. And Vignette, our youngest brand, that we launched last year, is now being put forward to the market.

So there is still the potential for new brands to enter the market?

We always consider opportunities. We try to make sure we match what the market needs with our collection of brands. For example, we developed Vignette last year based on the feedback we received from marketing in the UK or globally. We are creating brands to respond to the needs we hear from our investors and our owners and, most importantly, our guests.

How is IHG pursuing its sustainability goals?

Sustainability, or environmental consciousness, is part of our DNA. It's part of everything we do, whether it's a strategy that relates to new builds or operating in the existing estate and converging the assets on the market.

First and foremost, what I think really matters is approaching every opportunity with this lens, where we start the discussion by being grounded in the reality we are living in and the circumstances we need to respond to, but also being very clear about what our objectives are. We want to grow responsibly.

How have you responded to increasing energy prices?

Energy consciousness has been part of our actions for years now. Our efforts have been around making sure we don't actually use energy, regardless of the price it's at. We have a programme, IHG Engage, which is used by all our hotels. It has two pillars: one is tracking energy consumption, so that it can be compared and discussed, and the second is tracking the tools hotels can use to decrease their energy usage. So our strategy is to make sure we use the tools that are already there, but to first and foremost use less and to work with our owners and our procurement teams on supporting negotiations around the agreements on the energy markets.

Are cost increases dominating discussions with franchisees at the moment?

As a responsible partner we are here for the long-term partnership. So if the cost pressures are becoming an important topic of conversation, we will be here for support; we will be here with our procurement solutions for our franchisees. And we are here to discuss any other topic, whether it's a growth-related, recruitment-related, best practice in terms of retention, or conversations about the quality of our products and service.

You've relaunched your loyalty scheme –what impact do you think that can have?

We were actually the first group that launched a loyalty programme good few year ago and now we are relaunching it, adding a new flavour to the benefits that our members can enjoy. The objective of rethinking our loyalty scheme was to make sure we stay relevant to the next generation of travellers. After the two years of Covid lockdowns, when human interactions were disrupted, we wanted to make sure that we bring not only our brands forward, but also this recognition that the human connection is absolutely the strongest link between all of us, and we are here for our guests when they decide to choose us.

When you became managing director you said there was a unique opportunity to rethink the way that the group operates, how have you acted on that?

We are living in unique times. The world has shifted and some of those shifts have been visible and some are still happening, and we are only just learning how to describe them and learning the language that will be right for the future. That is the change I hope to be driving with my team here in the UK and it creates an opportunity to question things that you might have not questioned in the past. An example we have all been affected by is not going to the office five days a week.

We have been forced to change our ways of doing business by external circumstances and now, coming out of the pandemic, we are rediscovering our decision-making and choosing how and where we work, how and where we live, and how we enjoy our leisure time. Personally, I see my responsibility as being someone who can inspire others and empower others to question those things, whether they are small or whether they are large, and to try to find solutions or answers that haven't been discovered.

Image credit: Sarah Lucy Brown

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