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IHG boss continues to see opportunities in business travel

08 October 2020 by
IHG boss continues to see opportunities in business travel

There are still opportunities in the business travel sector, InterContinental Hotels Group (IHG) chief executive Keith Barr, has told today's virtual Annual Hotel Conference.

In an interview with BBC news editor Gavin Hewitt, Barr was positive about the future of the hotel market, and said although there was "a long road" ahead he felt it was "on the path to recovery". IHG, which has more than 5,900 hotels globally across brands including Holiday Inn, Crowne Plaza and Hotel Indigo, is seeing some travel demand returning over the summer "and we expect that to continue going forward".

Although Barr acknowledged the Covid-19 pandemic this year has impacted business travel, he said companies that are looking at shedding office space will need to make more use of meeting space in hotels as a result. He also sees opportunities in the ‘bleisure' market, and suggested that people will be travelling and adding on a few days of working remotely to the end of their holidays.

The big changes, he pointed out, have been in guest perceptions of safety. He said the first thing customers now ask about is safety "without question… customers want to know how you're cleaning the rooms, what chemicals you're using". Guests are also more comfortable visiting country and coastal hotels than they are big upper upscale hotels in urban centres.

"That part of our industry is going to be really challenged to recover until vaccines or a cure are out there," said Barr.

In the current climate, Barr said smaller hotel brands may be acquired by bigger companies due to their "power of scale", however IHG's focus is on "execution: making sure that we deliver from a health and safety perspective" and organic growth, such as scaling up its existing brands such as Avid and Six Senses. The latter is set to make its UK debut in 2023 in the former Whiteleys department store in London's Bayswater.

"There's clearly opportunities to add in more brands to the portfolio," he said. "The collection space is something we've spoken about."

However, he also highlighted the importance of every hotel business providing a safe stay to guests, as a bad experience at once hotel could put them off booking into any hotel subsequently.

IHG was one of the global hotel companies very much on the frontline of the coronavirus pandemic with a significant number of properties in China, including in Wuhan. Although Barr said the group was "well prepared" and had a global pandemic crisis plan on its risk register, he said the group "never thought we'd be acting on a global level", and much was learned from China.

He said his approach to the pandemic was to make hotels "part of the solution" and to take a long-term view: "At the end of this, when we're through this pandemic and when those stakeholders look at us – do they say we did the right thing to the best of our ability? What are owners/guests going to say a year from now?"

Barr said this approach has served IHG "really well", although the group came under criticism earlier this year when it began a consultation process at its managed hotels in the UK, which subsequently led to redundancies, including at its Kimpton Blythswood Square hotel in Glasgow.

Barr said he sees the hotel industry recovering and getting closer to 2019 levels of business in 2022-3: "That inherent desire [to travel] is there. It's a question of when is the free movement of people really going to come back in."

However, he also expressed concern that "governments don't understand the importance of travel and tourism in terms of jobs".

He added: "Governments around the world have to support this industry in the short to mid-term and have to have a path back… if governments don't get behind this you will see small businesses fall over, you will see job losses accelerate and that's not good for economy or society."

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