IHIF Q&A: IHG's Keith Barr on the future of hospitality, a strong brand portfolio and ESG goals

Keith Barr, Chief Executive Officer of IHG Hotels & Resorts, shares his insights on the future of hospitality, the importance of a strong brand portfolio, ESG goals and looking forward to travelling again, again of his participation the International Hospitality Investment Forum (IHIF) in Berlin in September.

Hospitality Insights: What is keeping you positive for the future of the sector, as the COVID-19 crisis is still dominating lives and businesses?

Keith Barr: The global economic and social impact of the pandemic meant we always knew it would take time to recover. No one could have prepared for an event of this magnitude, so we should all feel positive about how far we’ve come in the past year or so. We’ve kept our guests and colleagues safe, made sure we’re there for our owners and communities, and I think we’ve also evolved as a business too in some positive ways. What keeps me positive about the future is that wherever people are able to travel, we’re really starting to see demand come back strongly, and as vaccines continue to rollout and restrictions lift, that will continue.

We’re a strong, resilient industry that’s bounced back from previous downturns, and we have to remember that prior to Covid-19 we had outpaced economic growth for a whole decade. In 2019, IHG opened more hotels than in any other year and we were accelerating signings. The foundations of that growth – things like a growing middle class and global population, a shift to branded players, low cost travel – remain unchanged over the long-term, which gives us confidence in the future. Our owners share that too – we signed almost one new property a day during 2020 and signings in Q1 2021 were ahead of a year ago. And of course, the biggest driver of our industry is people’s innate desire to travel, explore and connect with others, and we should never underestimate that.

Hospitality Insights: IHG changed its name to IHG Hotels & Resorts this year. How long has this concept been in the making, and what has been the impact so far?

Keith Barr: To help guests choose the right brand for them, we’ve grouped our portfolio into four collections: Luxury & Lifestyle; Premium; Essentials; and Suites. We’ve also dropped “Club” from our loyalty programme to become IHG Rewards, so it feels more accessible to everyone, and we have a more sophisticated new IHG Hotels & Resorts brand ID and logo.
The changes make it crystal clear we have a fantastic family of 16 brands for guests to explore in some of the world’s most incredible destinations. The work started a while back in line with the expansion of our portfolio, and with everything that’s since happened with Covid-19, we’ve taken our time to get this right, particularly around avoiding extra cost or pressure on our owners.
We’re already seeing that we’re improving the perception of IHG and our brands, and increasing our appeal with important consumer groups, such as Millennials and Gen Z, and it’s been great to see such a positive response from guests, owners and the media. We’re busy now using it to drive business to our hotels, whether through increased visibility on OTA channels, or some great new marketing campaigns that are now live in the US.

Hospitality Insights: How is the new focus on the leisure segment sitting with IHG’s more traditionally corporate-focused brands?

Keith Barr: We’ve invested heavily in rounding out our portfolio, adding five brands in the past four years, so we have something for everyone and every occasion. I wouldn’t say leisure is a new focus for us, it makes up around 40% of our business, with the rest in corporate, so it’s an important part of the mix and we have some fantastic brands in the space.
During the pandemic, our industry outperformance in key markets has been driven by domestic leisure demand for brands like our Holiday Inn Brand Family, extended stay brands, and some of our amazing resort locations – and as more of the world opens up, our luxury and lifestyle brands are going to be in great demand as people get back to travelling internationally.

In parallel, we’ve also seen a lot of our demand from essential business travel, which has been less affected by Covid-19, and we’ve invested in our Meet with Confidence programme and state-of-the-art technology for hybrid events. Clients depend on this type of service, and we’ve actually increased our corporate market share in the past year. The power of personal connections means that non-essential business travel will come back too – it may look a little different, with less people making day trips for two-hour meetings, but we’re ready to meet new demand, including people blending business and leisure breaks or seeking places to work and collaborate as organisations reduce office space.

Hospitality Insights: IHG launched a new ESG programme earlier this year. How much is it changing the way you operate and your relations with partners? 

Keith Barr: Our Journey to Tomorrow 2030 plan builds on the important work we’ve been doing for some time, but pushes us to go even further, with science-led targets aligned to the UN Sustainable Development Goals. Our commitments are focused around reducing carbon emissions, water usage and waste; continuing to build a diverse, equitable and inclusive culture; and improving the lives of 30 million people in our communities around the world – be it through skills training, natural disaster support, or by tackling food poverty.
We recognise that how we grow as a business matters – both to us and to an increasingly broad set of stakeholders, who expect organisations to take charge of the ESG agenda. Achieving our goals requires us to work differently as an organisation, with our hotel owners, partners and governments. We’re working on multiple fronts, whether that’s conserving water in China, finding renewable energy sources in Singapore, or rolling out conscious inclusion training as part of building a more diverse and equitable workforce. It will take time to see the full impact of our work, but we mapped our ambitious commitments over a decade for a reason – to bring meaningful change, not just for IHG, but also hopefully for the wider hospitality industry.

Hospitality Insights: When hospitality and travel reopen, what is the first trip you will take and why?

Keith Barr: I’m certainly looking forward to getting out to our hotels and offices around the world to see colleagues, so I can thank them in person for all their incredible hard work during what’s been the most challenging period in our industry’s history. My first visit is looking like Atlanta in July. Travel plays a really special role in people’s lives – I know it does in mine – and so it’ll be so nice to see our hotel teams getting back to what they do best: creating special memories for our millions of guests.

I’m also excited about some family holidays I have coming up later this year in Ibiza and Norway. I certainly miss connecting with the different cultures, people and places that travel provides. They say life is about the journey and I think that after the events of the past 15 months, we’ve all come to realise there’s a great deal of truth in that saying.

Keith Barr will be joining the Global CEOs Panel at IHIF on Thursday 2 September 2021.