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Avid Enthusiasm

IHG Launches New Midscale Brand To Address Underserved Market

Wednesday, October 11, 2017
Dennis Nessler
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Looking to reinforce its position within the midscale space while filling what it has identified as a void in the segment, IHG recently revealed the launch of its new avid hotels brand.

Positioned to be slightly below its Holiday Inn Express brand in price, the new flag has been officially licensed for franchisees in the U.S. and is expected to break ground on its first locations in early 2018 with the first property anticipated to open in 2019.

The brand—which will be strictly new construction, at least initially—was first introduced to owners at the IHG Americas conference in June. According to the company, the brand is designed for travelers who want a hotel stay that meets their expectations with an emphasis on doing the basics exceptionally well.

The company cited research which showed there are currently 14 million underserved midscale travelers making up a $20 billion travel market. According to IHG, more than 150 owners have expressed interest in developing the new brand already.

Heather Balsley, SVP, Americas Brand & Marketing, IHG, explained to Hotel Interactive® the strategy behind the launch. “This new brand brings great growth potential for IHG. Avid hotels is a mass scale brand meant to seamlessly fit into markets all over the country…As a company, we see avid hotels as our newest opportunity to shape the midscale travel space for the better,” she said.

The price point for avid is expected to be about $10-$15 less than Holiday Inn Express, which represents IHG’s largest midscale brand with more than 2,500 locations globally. Balsley, for her part, acknowledged the opportunity for the new brand and insisted it will not impact any of the company’s existing brands.

“We designed a fresh, new brand for the underserved midscale traveler, and our research informed us that no existing brand is serving the needs of this guest today. For the avid hotels brand, we are targeting a sizable ADR gap as well as a fully differentiated guest experience from IHG’s existing midscale offerings. Given this clear distinction, there will be minimal cannibalization across brands,” said Balsley.

The operating model for avid was developed in collaboration with IHG’s owner advisory board, ensuring that the hotels are efficient to build, operate and maintain, according to the company. Hotels will be designed for new-build construction on an average lot of approximately 1.5 acres, and all avid hotels will be built to lead the industry in environmentally friendly and efficient design. The prototype design features 95-100 keys with a minimum of three stories.

The modern exterior hotel design includes an open and airy retail-like entry, a canopy and uses the stairwell as a red architectural feature. On the interior, guests will find vibrant, open public and work areas and communal spaces that allow them to relax, work, connect or eat, according to the company. Hotels will also leverage IHG’s cloud-based next-generation reservation system.

Meanwhile, guestrooms are constructed with sound reducing features and the bathroom experience is designed to re-energize guests with a fresh and bright design. Each guestroom will also offer a dedicated workspace and ample open, easy-to-use storage as well as in-room entertainment options that allow guests to cast content from their smart devices to in-room televisions, according to the company.

The brand’s colors are red and aqua with a logo that features a signature checkmark. The brand is also the first to launch using IHG’s master brand mark, an IHG Hotel, in communications and building signage.

Balsley offered some insight on the branding decision. “This new brand combines clarity and confidence with character and comfort. Simple, straightforward, yet never sterile—the name describes how avid hotels should always look, function and feel,” she said, further adding, “the logo features a signature checkmark, which acts as a stamp of confidence that avid hotels will deliver an unrivaled experience to today’s midscale travelers.”

Balsley also detailed what the new flag is expected to represent. “The brand has been created around a set of fundamental beliefs: that guests in the segment need a hotel that’s passionate about a great night’s sleep; that’s determined to provide clean, comfortable stays for all; and that’s focused on finding the perfect balance between quality and price,” noted Balsley.

Some key elements of the initial offer to prospective franchisees include a 5 percent royalty fee. In addition, the first 100 signed license agreements will be eligible for a 2 percent fee discount in year one and 1 percent fee discount in year two.

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Dennis Nessler    Dennis Nessler
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Hotel Interactive®, Inc.
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