Interview: IHG to double presence in SE Asia

Thai beach.
IHG is looking to tap growth from record high tourist arrivals in Thailand and other parts of Southeast Asia.

With plans to double its presence in Southeast Asia, InterContinental Hotels Group (IHG) is laying the groundwork for a big year and an expansion of its boutique offerings in the region. 

It is only March, but 2016 is shaping up to be a good one for IHG on the back of new properties as well as M&A moves. Leanne Harwood, vice-president of operations for Southeast Asia and Korea at IHG told HOTEL MANAGEMENT about the company’s plans for the coming year in this important and dynamic region.

HM: How did IHG properties in Southeast Asia perform last year? What were the most significant factors?

Leanne Harwood: 2015 was a very good year for us. We are part of the larger Asia, Middle East and Africa region which saw a RevPAR (revenue per available room) growth of 4.5 percent. Our properties in Southeast Asia played a key role in this growth with six new hotel openings last year, including the first Crowne Plaza and InterContinental hotels in Bandung, Indonesia. We also celebrated the launch of Hotel Indigo, our boutique hotel brand, in the region with the opening of Hotel Indigo Bangkok Wireless Road last year. All this brings us to a total of 59 hotels and resorts, over 17,400 rooms, open in Southeast Asia across five brands in seven countries.

Looking ahead, we are very excited about doubling our presence in the next few years with 60 properties (16,000 rooms) in the development pipeline to cater to a robust demand for hotel accommodation in the region.

HM: What is IHG’s outlook for the region?

LH: We are also very optimistic about the region’s outlook. Southeast Asia welcomed 5 percent more international arrivals in 2015, making it one of the fastest growing regions for international tourism and we expect this momentum to continue with positive year-on-year growth. Moreover, with the ASEAN Economic Community (AEC) coming into full effect this year, the improved visa processes and increases in low-cost optioins for more affordable air travel will continue to boost intra-regional travel amont ASEAN nations.

HM: IHG’s CEO recently said that the company may seek to acquire boutique chains in Asia this year. What advantages do smaller brands offer in this region?

LH: We have been in the region a long time, and in one as dynamic and diverse as Southeast Asia we recognize people travel for many different reasons. One of the main trends we’re seeing is travellers looking for authentic local experiences – and they want to do this through a unique travel itinerary incorporating local culinary experiences and local sights, and through the hotels they choose to stay in. Boutique hotels are indeed in a unique position ot offer these refreshingly local experiences to guests and that is why se see great potential for us to grow our Hotel Indigo brand in the region.

Each Hotel Indigo around the world is different as it is designed to reflect the local culture, character and history of its immediate neighbourhood, so it absolutely caters to the segment of travellers looking for the individuality and style of a boutique hotel.

HM: In terms of IHG properties, which Asian markets do you expect to perform best this year? What factors do you expect to drive this?

LH: Our outlook for this year is very positive and we are confident our hotels across Southeast Asia will continue to see demand from travellers. We are particularly excited about Thailand, which has seen its share of ups and downs in recent years, and its resilience and unparalleled pace of recovery has only served to increase our confidence in the long term. The country brok through its tourist arrivals record last year, welcoming nearly 30 million visitors and this year it is expecting to receive 32 million travellers.

Contributing to this growth is a robust MICE tourism industry – Thailand has been recognised as Asia’s top MICE destination and the government’s ongoing efforts to promote Thailand as a must-visit in the region for meetings and events will only spur this on.

Thai airports have also recorded an increase in domestic passenger traffic and aircraft movements in January 2016 compared to the same period last year, with Phuket International Airport registering the largest increase of 18 percent and 24 percent respectively.