InterContinental launches conversion-friendly hotel brand voco

British multinational hotels company InterContinental Hotels Group (IHG) has unveiled its new upscale hotel brand 'voco' to tap the conversion opportunities available in the global hospitality market.

DNA Money had first reported this development on April 16 this year wherein senior company executives had said that a conversion-friendly hotel brand was in the works. The idea behind this brand, IHG executives had said, was to speed up the growth of its hotels portfolio in India and globally.

Keith Barr, chief executive officer, IHG, said there is a significant growth opportunity for IHG in upscale and the brand 'voco' will help the hotel company deliver against this.

“We’ll work with owners of attractive properties, who appreciate the power and expertise that a global business can bring to the table. Guests will be able to enjoy the appeal of a more individual hotel, alongside the reassurance of a name above the door that they trust. The versatility of the brand means a voco hotel can retain and celebrate all of the elements that make that existing hotel successful,” Barr said in a media statement.

Rebranding of hotels as a strategy has been aggressively pursued by international and homegrown companies in the Indian hospitality market. Some of the players that have already tasted humongous success with it include Marriott, IHG, SAMHI to name a few.

Elaborating on the potential for conversion opportunity in India, Nandivardhan Jain, chief executive officer, hospitality consultancy Noesis Capital Advisors, said in the Indian context, conversion is largely happening in mid and economy segment. “In last 12 months, we have successfully concluded 37 such transactions on franchise, operations and management or variable lease model with brands like Lemon Tree, StayWell, Fern, Lords, VITS, Svenska, Royal Orchid, Mint Hotels to name a few. In this space, conversion can be migration from a standalone hotel to branded one and a shift from one brand to another brand.”

“There are various trigger points which led owners to take such decisions like non-performance, change in financial priority from management to lease model, bandwidth issue with the owner, easy financing under lease model with lease rental discounting. In upper scale and luxury category, we are currently running nine such conversion mandates across India,” said Jain.

As for brand voco, it is inspired by the meaning ‘to invite’ or to ‘come together’ in Latin, and will focus primarily on conversion opportunities. It will strengthen IHG’s offer in the $40 billion upscale segment, which is expected to grow by a further $20 billion by 2025. The hospitality chain will work with high-quality individual and locally-branded hotels and offer owners the ability to drive higher returns through delivering a compelling guest experience.

“The new brand will drive significant incremental growth for IHG, with an expectation to open more than 200 voco hotels in attractive urban and leisure locations over the next 10 years,” the hotel company said in the statement.

The roll-out of voco, IHG said, will begin in Europe, Middle-East, Asia and Africa (EMEAA) region, with plans to take it to the Americas and Greater China over time. While voco is yet to debut in India, IHG has signed the first property down under in Australia. The Watermark Hotel & Spa Gold Coast, Surfers Paradise, Australia, is a 388-room hotel that will shortly be acquired by IHG’s long-standing partner, SB&G, which currently owns five other IHG hotels in Australia. This hotel is due to open under the voco flag in late 2018.

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• The idea behind this brand was to speed up the growth of its hotels portfolio in India and globally
   
• There is a significant growth opportunity for IHG in upscale and the brand ‘voco’ will help