IHG reveals name of new luxury, lifestyle collection brand

Insight Comment IHG is going a slightly different route to its competitors when it comes to high-end expansion. Rather than splashing more cash on buying up a smaller rival, it plans to grow Vignette Collection through converting independents. This will no doubt be a slower strategy than through acquisition but it will be much cheaper. One thing to keep an eye on will be the pace of hotels joining the portfolio.

IHG Hotels and Resorts has wasted no time in rolling out its newest brand: Vignette Collection.

The company announced details of the launch earlier this month and has now revealed details of the first properties.

Vignette Collection becomes the sixth addition to IHG’s brand portfolio in the last four years, taking it to 17 in total across nearly 6,000 hotels in more than 100 countries.

The brand is also the latest in its fast-growing luxury, lifestyle stable. 

“We’ve been strategic with the enhancements we’ve made to our Luxury & Lifestyle portfolio in recent years, which at more than 400 hotels and 100,000 rooms is the second largest in the industry,” CEO Keith Barr said.

“We’ve built on the heritage and global success of our InterContinental brand, with the rapid international expansion of Kimpton and Hotel Indigo, and acquisitions of Six Senses and Regent. We expect to attract more than 100 Vignette Collection hotels in 10 years, and the brand will be key to delivering our ambition of industry-leading net rooms growth.”

IHG has named two hotels that will be joining the collection: Hotel X, a 5-star hotel, dining and lifestyle destination in Brisbane’s Fortitude Valley and Thailand’s Pattaya Aquatique hotel.

What Vignette gives IHG

IHG has had a busy couple of years buying or launching new brands to help it fill in what hotel executives love to call “white space”. Avid, Atwell, Voco, Six Senses and Regent have all been added and now comes the Vignette Collection.

The new brand is all about bringing high-end independent hotels into the IHG ecosystem and makes sense for a couple of reasons.

The first is that conversions are a lighter lift than acquisitions or new builds. The second is that luxury lifestyle sector has been more resilient during the Covid-19 pandemic and importantly is tipped for success in a world of pent-up travel demand. Thirdly, IHG itself is ready to bring in independent properties, as Barr explained on a recent call with analysts.

“Why this is such an important brand for us now is… we've strengthened our technology platform, we've strengthened our loyalty platform which are critical components of delivering to a collection play and wanted to make sure that we could really have that enterprise that could deliver high returns for our owners, increased investment in our procurement function as well too, so getting all those things right for a collection or a softer brand, and they're in place now, he said.

Barr also said that the new brand play could let IHG “lean into the all-inclusive space as well”. This is an area where Marriott and Hyatt have both expanded in recent years through acquisition. IHG’s tactic would mean more gradual growth but it would be much less capital intensive.

“We can build this brand organically, leverage our investments we've made in technology and loyalty and not have to utilize capital to go acquire something,” Barr added.