As CEO of the region, Kenneth Macpherson is responsible for the management, growth and profitability of Europe, Middle East, Asia & Africa (EMEAA), the most diverse operating region for IHG Hotels & Resorts. He shares his thoughts on development, relations with owners and recovery in the region.
Hospitality Insights: What is your outlook for the recovery of the hospitality and travel sector in Europe, Middle East, Asia and Africa?
Kenneth Macpherson: I’m optimistic about our future as an industry and as IHG Hotels & Resorts. Without a doubt, the pandemic has marked the most difficult period in our history, but I’m certain we will recover.
Vaccinations are the key to recovery. As they’re rolled out, restrictions lift, and consumer confidence returns – there is a direct correlation. Demand will remain largely domestic for now, although I’m confident international travel will also return in time, which is so important to many of our markets. I expect this will build up slowly in the second half of 2021 and then grow quickly as travel restrictions are eased.
Hospitality Insights: What is the main focus of IHG’s development strategy for the EMEAA region in 2021 and beyond?
Kenneth Macpherson: Even during the height of the pandemic, in 2020, we still managed to sign nearly two hotels a week in our region and nearly one a day globally. In a region as diverse as EMEAA, it’s vital that we really understand the situation in each market, which is why we’ve invested in our development teams to ensure that we have colleagues on the ground in our key markets who are there to truly understand each owner’s unique situation. We’re already seeing the importance of these relationships come to life this year with signings across the region (Australia, Japan, France, Germany, Turkey, Saudi Arabia, Singapore and more).
Hospitality Insights: IHG reported that 25% of signings last year were conversions: do you see this as a major trend in the coming years and beyond?
Kenneth Macpherson: Our independent owners have told us that they find the strength of our brands and systems very attractive, so we’re perfectly placed to capture the broad range of conversion opportunities we’re seeing. When owners are considering a conversion, we have many perfectly placed brands for them to choose from. Globally, we signed 56 properties into our growing Luxury & Lifestyle pipeline last year, of which conversions made up around 30%, showing the attractiveness of brands such as Kimpton, Regent, Six Senses, InterContinental and Hotel Indigo.
Hospitality Insights: The premium voco brand also features heavily in these conversions – what makes it particularly attractive?
Kenneth Macpherson: Yes, voco is a big part of that, and we’re on track to hit our goal of 200 voco hotels within 10 years. That’s something I’m especially proud of as voco was born in EMEAA in 2018, since then it’s grown globally quicker than any other IHG brand, with some great hotels in places such as Paris, Dubai, New York, Melbourne and Johannesburg. It’s versatile, too – we’re opening a first resort location in Saipan and a first all-suite property in Doha. It’s a really attractive brand for owners because it doesn’t take long to convert their property into a voco hotel, which helps them to quickly benefit from IHG’s global scale and maximise their returns. Guests love it too, with some voco hotels seeing satisfaction scores increase by double digits post-conversion, which is fantastic to see.
Hospitality Insights: The pandemic has affected the relations between owners and brands. How have you managed that and what long-term impact do you expect it will have for IHG and its partners?
Kenneth Macpherson: We’re doing everything we can to look after our owners. It hasn’t been easy for anyone, but we’re doing our best for them and I know many of them have recognised that. We’ve worked closely with the IHG Owners Association, which represents the interests of more than 4,500 owners, to ensure they’re fully aware of the wide range of operational and commercial support we’re providing, such as our enhanced IHG Way of Clean programme or guidelines over breakfast, which have been tailored to different markets. Our great relationship with the Owners Association has helped us to improve guest experiences and brand perception in cost-effective, sustainable ways for our owners.
We’re also working with governments, trade bodies and peers to support a recovery and the resumption of safe travel. I recently attended my first meeting as a member of the International Trade and Investment Council – part of the Confederation of British Industry – during which I shared my views on topics including resuming cross-border travel and sustainability with peers from the finance, manufacturing, energy and retail sectors.
Overall, we’ve learned so much as a company, and I know that’s reflected in how our owner relationships are evolving. We’re really challenging ourselves to step into their shoes and we’ve made processes simpler, prioritised harder, communicated better, and listened even more. We’ll keep doing this and keep being the best partner we can be.
Hospitality Insights: When hospitality and travel reopen, what is the first trip you will take and why?
Kenneth Macpherson: I can’t wait to start travelling again and go and say thank you in person to the incredible teams who’ve worked so tirelessly in our wonderful hotels across EMEAA. For now, I’ll definitely be taking advantage of the great British staycation and heading out for some long weekends in the United Kingdom.
I’m also hopeful to be able to get out to some of our offices across the region.
After travelling for most of the year in 2019, I – and my family, I think! – are very much looking forward to the day when I can get back out of my home office and start seeing the teams much more regularly.