Couture Lab
September 30, 2008
The Future of IHG
Source: hotelsmag.com
5 Minutes With Andy Cosslett, IHG Chief
By Derek Gale, Senior Editor — Hotels, 9/26/2008 11:47:00 AM
At the 2008 IHG Americas Investors & Leadership Conference in Los Angeles, IHG Chief Executive Andy Cosslett took time to meet with members of various media outlets and answer questions about the company, its brands and the business moving forward.
Question: Is it realistic to realize incoming IAHI Chairman Tom Corcoran’s stated goal of re-imaging Holiday Inn as an upscale brand?
Cosslett: Moving Holiday Inn up a segment, to compete with Courtyard By Marriott and Hilton Garden Inn—I agree with Tom. I prefer not to classify the segment—midscale, upscale, etc. But I share the principles and philosophy behind Tom’s point. What we do as a brand manager is upgrade and uptrade customers through innovation. If we do it right, the brand will be able to take an increasing premium over others in the competitive set not doing those things.
We’re positioning Holiday Inn as a very different product than it has been for the previous 10 to 15 years. I think over time, [moving up] is a very good target to give ourselves. It’s a good ambition to start to manage Holiday Inn’s relative position against the brands considered above it. So yes, it is realistic given the quality of what we’ve done.
Question: Tell us about the performance of the already relaunched Holiday Inn properties…
Cosslett: Anecdotally, where we’ve seen hotels move to the new look and feel and training, we’ve seen good success in being able to move rate. Guests reappraise the hotel as they drive up. It makes local competitors look old and tired, and people over time will respond to that and be prepared to invest a bit more.
Question: Was getting into the timeshare business an objective, or was the Orange Lake Resorts partnership an opportunistic move?
Cosslett: We were looking hard at how develop the Holiday Inn brand beyond the relaunch. We knew the value of the brand, and you want to see how far you can stretch a brand to get value from it. So we were starting to think about it playing in other places, but timeshare was not of particular interest to us until we met the Wilson family and talked to the management about what was going on. We had dismissed timeshare previously for various reasons—the model didn’t work, the financing didn’t work. But this venture was unique and an obvious way to use our strength. So timeshare wasn’t on our strategy as such, but it was definitely part of our strategy to develop the Holiday Inn brand.
Question: Will you look to grow the timeshare business beyond the initial four resorts? If so, what markets are attractive and how quickly will you look to grow?
Cosslett: There have been conversations about where this goes. We’ve talked in principal about the desire to grow, and we have a sense of the opportunities that exist. There’s been markets where I think Orange Lake have been looking to get into over time, markets in which we certainly believe our brands have less representation than they should have, given their scale and opportunity. We can talk about Las Vegas and Hawaii—where Holiday Inn can and should play and the brand should be seen. With this particular vehicle, we could consider those at some point, but our immediate focus is on the rebranding. If this venture is as successful as we believe it will be, opportunities will be there.
Question: Is it correct that about 70% of your total pipeline is financed at this time? What impact does the current economic situation and the lack of available debt have on your projections?
Cosslett: As far as we can ascertain–we don’t get the details of financing arrangements. But [the 70% figure] is the best we can establish. What we see is normal rates of attrition for the pipeline. The normal rate is 10% per annum fallout, and at the half year we are running below that level. And since then, I am not aware of any projects coming out of the pipeline. Things could turn—who knows what the next week is going to bring? Because our pipeline is so large, we could imagine a world with more attrition, but we could absorb that because we have 242,000 rooms in the pipeline. It also helps that we’re in the mid-scale business, where financing is more available than at the top end.
Question: What is the biggest challenge IHG faces, besides the economy and the credit crunch?
Cosslett: The biggest issue and challenge for us and our focus is attracting more people to the business—we’ll need 200,000 people around the company in the next few years. How we do that is something we talk about a lot. We’re trying to [promote] IHG’s culture, the way the company thinks and does business, and the way it presents itself—as a company that’s creative, that has buzz. We’re the most international hotel company, and if we present all those interesting facets of our business right, and lump onto that our growing corporate social responsibility agenda, which is a big driver of young people joining companies today, [we should succeed].
Question: Now that you’ve achieved growth of 60,000 rooms more quickly than the desired 3-year timeframe, what are your goals from here?
Cosslett: We don’t have any quantified targets set out, because we’re still in the three years. The fact that we’ve beaten the upper end of the target is good, but we want to reach the end of this year with as much distance between the target and our actual numbers as possible. We have to finish our race before we do anything else. We have momentum, and that’s great. We’ve set out our purpose—’great hotels guest love,’ and we are in the process of defining what that means and how we measure that. What can we do in hotels and the organization to deliver on that so it’s not just a slogan, but actually a way of operating right down to front line? That will get clearer expression in 2009.
September 21, 2008
GREATNESS
A new insight:
http://shaferfinancial.wordpress.com/2008/09/17/here-is-what-the-news-isnt-telling-you/
Just thought I would blog on some issues and events the news isn’t bringing to you:
1. Interest rates are so low that many of those variable rate loans that are resetting this year are doing it at or below their current levels. So those that follow the strategy of using variable rate loans (they have inherently lower rates than 30 year fixed rates) have saved themselves thousands of dollars in interest!
2. The genesis of this financial turmoil is not banks and Wall Street behaving badly, but the 1999 repeal of the Glass-Steagall Act and the passing by the Clinton administration of the Gramm-Leach-Billey Act which broke down the firewalls between investment banks, commercial banks, and insurance companies. Previous to this they could not delve into each others business. Investment banks, the risk takers, could have bought the toxic mortgage backed securities, but commercial banks and insurance companies would have been unable to participate in that business. Sub-prime was born out of investment banks, and the rest of the toxic loans were a result of this.
3. Variable rate loans are not the issue, no down payment and low down payment loans are. Fraud in the so called “liar loans” (stated income) is another large cause of the current mess. If people had to come up with 5% down plus closing costs, then the real estate run-up would have been contained and the values would not have yo-yo’d up and then down so vigorously. If banks had looked at reserves closely this would have helped too. Giving a 100% loan to someone with no money was asking for foreclosure and everyone knows it.
4. Plenty of money is being made by businesses and investors, although those in mutual funds are seeing dramatic drops. Why is this? Some enterprising reporter should examine this issue.
5. Finally, the end of the world is not near. See these two posts for great commentary:
http://www.bawldguy.com/3-star-movie-redo-of-were-all-gonna-die-iv-the-end-is-near/ and
http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/
Have a great wealth building day!
September 4, 2008
Buddha-Bar Hotel, Prague
Peace and serenity in Prague, coming soon to a top destination near you.
“The new Buddha-Bar Hotels & Resorts group strives to exceed the highest standards of a 5-star hotel while enhancing every guest´s stay with highly personalized services and an atmosphere that caters to all senses.
This unique concept is owned by George V Restauration, responsible for the successful Buddha-Bar restaurants currently operated in Paris, New York, Dubai, Beirut, Cairo, and very soon London, Kiev, Macao and Manama. The original interior design was created by Raymond Visan and his team. Architect Zbyšek Stýblo and Gama architectural studio participate in the project. Oriental flair will be reflected in colors, materials, flavors and fragrances to the smallest detail.
The Buddha-Bars worldwide are known for their pulsating energy and unforgettable atmosphere, and since 1996, with the very first Buddha-Bar opening in Paris, they have been attracting celebrities from around the globe.Buddha-Bar Hotel Prague, located in the heart of Prague close to the Old Town Square, will have the same fusion, flair and ambience as the restaurants. Two “eatertainment” venues, the world famous Buddha-Bar (250 seats) and the refined Siddharta-Café (100 seats) will feature a masterful blend of Asian and Western cuisine in a Pacific Rim style. Its operators, CPI Hotels and J&T Group, plan the grand opening for the last quarter of 2008.
the Buddha-Bar Hotel Prague will embolden the essence of contemporary Oriental interiors with a French colonial influence
With its state-of-the-art facilities, including a hammam steam room and buddhattitude spa treatments in the quiet convenience of the guestroom, the Buddha-Bar Hotel Prague will go beyond expectations to ensure a relaxing yet rejuvenating and harmonious experience.
Dine or chill out in the luxury of the room to the smooth Asian sounds and world beats.
New hotels are scheduled to open at a later date in Panama, the Dominican Republic, Paris, New York, Marrakech, Budapest, Sal Hasheesh (Egypt) and “The World” – Dubai´s ambitious island project shaped like the continents. At the end of the year, the number will increase as more developments will be announced.”
information provided by Hotelsmag.com
