IHG to Launch New Franchise Model in China
Luciana Mangas May 13, 2016
InterContinental Hotel Groups (IHG) has announced in Shanghai the launch of a new franchise model this past Wednesday. HospitalityNet reports that their Holiday Inn Express brand will have a new model called Franchise Plus tailored specifically for the Chinese market and providing owners with all of the benefits of operating a franchise model, but with additional benefits and features from IHG’s managed model.
This announcement comes as IHG signs its first Franchise Plus deal with Shanghai Yaqi Business Hotel Co., Ltd., for a new Holiday Inn Express hotel in the Hongqiao area of Shanghai. Kenneth MacPherson, CEO of InterContinental Hotel Groups in China, says that the launch of Franchise Plus for their Holiday Inn Express brand is an important milestone for business and for the accommodation landscape in China. With IHG’s world-leading expertise in franchising and long-standing operational excellence and knowledge of the Chinese market, they are “confident that the new model will be an engine of growth for IHG and [their] business partners in the coming years.”
“IHG has over 30 years’ experience of operating in China and working closely with our hotel owners to deliver on our promise to create great hotels guests love. We are also an innovative business with a deep understanding of our guests and their needs,” MacPherson assured.
IHG was the first international hotel company to enter China in 1984, and it continues to be the market leader in the country, operating 268 hotels across 100 cities. Holiday Inn Express is one of the fastest-growing brands in the world. It has over 2,400 units globally and is the leader in the mid-scale segment in China, with 66 hotels established in over 30 provinces and cities.
[Photo: IHG]
I think that's the Shanghai Putuo HIX in the image on top. Stayed there a few times. Very reasonable prices, decent rooms. Not the most convenient place for sightseeing though. But in regards to franchising story, the HIX brand, this doesn't sound good. A lot of Chinese franchise hotels, that claim to be on the HIX level, are operated far worse than the HIX. Poorly kept, unsanitary, and in some cases, unsafe. The Han-Ting hotel chain is a prime example of this. Originally built to emulate the HI and HIX model, by a Chinese entrepreneur who studied western hotel management, they started out promisingly enough, but many of them have spiraled down into hostels and love hotels. I'd hate to see HIX's pop up all over china, but run in the same shoddy way.