Intercontinental Hotel Group: please sell Kimpton


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Kimpton Hotels and Resorts are among the most unique upscale hotels in the world, which is why they have no place at IHG.


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Kimpton occupies a unique position in the market

Kimpton, IHG’s smartest acquisition, was purchased to fill a gap in the mid-market with modern hotels and a cool factor reminiscent of W, Andaz, and Edition. Kimpton focuses on design and caters to a young, affluent clientele, although many of their properties are quite affordable. W Hotels is much more expensive for a similar product, Andaz too, but the latter is just a little quieter than W. Kimpton, has the design and, for lack of a better word, cheeky, of W without the high price tag.

Kimpton is a small chain (only 1.2% of IHG’s portfolio) upscale from Indigo, but more accessible than the newly acquired Six Senses.

IHG is just awful

Despite all of its flaws, IHG identified its gaps in the market: luxury, lifestyle, resort – and worked to get brands to fill those gaps. For the high end of the market, Regent was acquired by the hotelier to compete with Park Hyatt, Waldorf-Astoria (Hilton), St. Regis and Ritz-Carlton (Marriott.) At the time the 51% stake was purchased Regent only had six properties; IHG intends to increase it to 40 hotels. For one of the world’s largest chains (6,031 hotels worldwide), the entry of six establishments into the $ 60 billion luxury hotel market sums up the brand’s approach.

Intercontinental Hotel Group cannot be trusted for the long term survival of a meaningful loyalty program. Kimpton developed his own, Inner Circle, with great benefits and a unique culture. They promoted a “secret word” that its members could say on the tape that would give them a Kimpton Inner Circle gift; benefits and the secret word changed quarterly to keep members engaged.

Kimpton Seafire Resort Park

During this time, IHG does not offer a guaranteed 4pm late check-out, free breakfast, or confirmable upgrade to its most loyal IHG Rewards Club customers with 75 or more stays in a calendar year. To get some (but not all) of these perks, you need to apply and pay $ 200 – and that only qualifies for Platinum status.

IHG Rewards Club points have devalued its redemption in recent years, dropping from 50,000 points as the highest category trying to squeeze in to 120,000 during the pandemic. They eventually withdrew due to substantial member vitriol. The credit card offers little value compared to competing brands and they don’t seem to care. Earning IHG Rewards points doesn’t help if they devalue faster than other programs for hotel stays that you rarely want to book anyway.

While I don’t like Marriott Bonvoy, even this program is more reliable and offers more value than IHG and would be a better home for the brand.

IHG hates its elites. Even as an IHG Rewards Business Edge member, I found little value in the program and virtually no access to using the Rewards Club customer service center for large bookings from many customers for an extended period of time.

Why IHG should sell Kimpton

IHG has helped Kimpton grow from a few dozen properties to 75 in more than 50 cities. Is there a better time to sell? IHG has been able to acquire the brand, add customers (whether they are suitable or not, more info below), add value and can now sell a much more mature brand with a greater reach.

The reason other brands are able to grow and build an audience with their premium brands is that their offerings are broader. Premium brands at SPG made up a much larger percentage of its portfolio. Hyatt also has a significant portion of its brand above certain service categories (Hyatt Place, Hyatt House) and Marriott does a better job than IHG. Here’s a great example of why:

A premium guest who spends time at Intercontinental properties to work in big cities, wants to relax on vacation with her family. In Hawaii, for example, there are only two properties – neither of them offer full service. In Barcelona, ​​all choices for IHG are under $ 100 / night with the exception of the Intercontinental, Kimpton, and Hotel Indigo. We find the same limited offers outside the selected service in Rome. A high-end business traveler does not wish to stay at the Holiday Inn Express Waikiki.

Holiday Inn Kona

It doesn’t match the rest of their brand because it doesn’t match their customer base. Majority of guests are Holiday Inn guests (I’m not casting a shadow, this was the best hotel in a city I’ve worked a lot in and got Speyer status because of it) , but they are rarely willing to pay the extra for Kimpton. That said, some Kimptons are priced below what they might get with a more premium customer base and marketing that works for those brands.

Conclusion

I really enjoy the Kimpton Hotels. Each of the ones I have visited offers a cool factor worthy of a premium. If they were part of a loyalty program where I had a wider range (both top and bottom) I would be much more likely to choose them as often as possible. The reason I’m not doing this is because there isn’t enough to make it my main channel, and there just aren’t enough other quality brands in a program. loyalty that brings me value. For IHG’s part, they’ve built the brand and can make a profit on the bigger product, but Kimpton just doesn’t match the rest of her customer base.

What do you think? Should IHG sell Kimpton? Should it keep the brand and develop it?

About Brad S. Fulton

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