Video: IHG CEO Richard Solomons on hotel cycles, slowdowns and partnerships

BERLIN, Germany — During IHIF 2017 in Berlin, Questex Hospitality Editor-in-Chief David Eisen sat down with Richard Solomons, CEO of InterContinental Hotels Group, to talk about the hotel company's growth, trends in the cycle and what gives the head of a major hotel corporation grey hairs. Video is below, sprinkled in with some highlights from their conversation.

1. Long-Term Thinking Wins the Race

“Around the world, we’re at equal or ahead of the previous peak in terms of signings,” Solomons said. But that, of course, can change, and no company should rest on its laurels. “We’re in a long-term industry,” he said. “We’re trying to work with owners who think long-term. We think long-term. We finance the business conservatively. We invest in cycles, and we want to work with owners who do the same thing.” People investing today may face some challenges in the coming years thanks to political concerns around the world, Solomons acknowledged. “But in a long-term business, you have a fund behind it,” he said. “That’s what’s driving the number of signings.”

2. Slowdowns Are All Part of the Cycle

IHG’s RevPAR has been growing over the last few years, but the growth rate has declined year-over-year. “I have a few grey hairs,” Solomons quipped, but emphasized that the industry is cyclical, and slow-downs are not uncommon. “We’ve had a lot of growth the last few years,” he said. Last year, IHG grew its RevPAR by 1.6 percent and improved overall revenues by 5 percent, which Solomons credits to adding rooms and growing the overall system size. “We’re growing our revenue because the industry is growing,” he said. 

Virtual Event

HOTEL OPTIMIZATION PART 2 | SEPTEMBER 10 & 24, 2020

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.


3. Things Can Change

But these are tumultuous times, and Solomons is aware that major changes like the Brexit or elections in France and Italy can affect IHG’s profits. “To the extent these changes over time drive GDP upward or down, that will impact our business,” he said. “Uncertainty, in the short term, is never good for investment. We rely on people borrowing money and investing in hotels. Uncertainty isn’t helpful.” 

4. Expertise Is Invaluable

In the face of uncertainty, Solomons said that IHG’s job is just to look after the hotel guests and look after the hotel owners and deal with the ups and downs. “That does require having a depth of expertise in the business and it requires having a well-financed business that can look through cycles and issues and be locally responsive—whatever that may mean.”  

5. Education Can Help You Prepare for What’s Ahead

Solomons recalled that at a previous IHIF, Marc Finney, head of hotels & resorts at Colliers International UK, predicted that, in the future, the industry would have fewer hotel companies and brands. “And he got that right.” 

Follow IHIF 2017 on Twitter @IHIF_News and use #IHIF2017 to stay up to date with the latest news from the leading annual meeting place for the industry. Also find us on Facebook and join our LinkedIn group for industry insight and discussion.

Suggested Articles

The company's main markets are still substantially affected by the measures rolled out to combat the COVID-19 health crisis.

Revenue per available room and occupancy increased over Q2, but uncertainty around the industry’s recovery remains.

The integration aims to provide hoteliers with seamless and complete visibility over group, catering and event sales performance activity.