HD Talks

Soft Brand Shuffle

Posted by on December 17, 2014 in Trends

I have to hand it to UK-based InterContinental Hotels Group (IHG) for acquiring Kimpton Hotels & Restaurants for $430 million. It’s such a smart strategic move that it almost makes us forget all the recent announcements of lifestyle, Millennial-focused brands that took over the industry news cycle in the fall.

In a conference call with media yesterday, IHG CEO Richard Solomons, said the addition of Kimpton will only complement, not compete, with its lifestyle brand EVEN and boutique-style property Hotel Indigo, giving IHG the edge as the leading lifestyle and boutique hotel business with 200 open and pipeline properties.

This year especially, there has been a focus on the rise of soft brands. IHG did this in a different (and perhaps better?) way. On the heels of Hilton’s Curio launch or Marriott International’s growing Autograph collection, acquiring Kimpton gets IHG into the soft brand game without having to seek out boutique properties around the globe. Kimpton already has a loyal following.

DirtyHabit4

Dirty Habit, inside San Francisco’s Hotel Palomar in San Francisco, is one of the 75 hotel-based restaurants and bars IHG acquired in its purchase of Kimpton Hotels & Restaurants.

Now, this is smart. By buying a stalwart of the boutique brand movement, the fast growing segment in the industry, IHG now has a brand that travelers already know and like but also possesses the ideals of modern, successful hotels: they’re innovative, they values authenticity and individualism, they have local flavor and offer guests a unique experience.

On the other hand, for the 33-year-old Kimpton to not remain stagnant, joining IHG gives it access to the company’s distribution system, website, and revenue management tools, and “also presented us with a fantastic opportunity that really aligned with our vision to propel the boutique category and accelerate our global growth plans,” writes current Kimpton CEO Mike Depatie in an email to us.

Dan Lesser, president and CEO of LW Hospitality Advisors says it will “be interesting to witness how deftly IHG will be able to expand the Kimpton ‘sizzle,’” while also appeasing Kimpton loyalists who are concerned about how an international company like IHG “known for standardization” will integrate Kimpton’s “trendy unique hotel experiences” into its portfolio.

But this type of acquisition isn’t unprecedented either. Lesser points to Marriott’s success in integrating Ritz-Carlton into its family of hotels. “Kimpton will flourish on the IHG platform,” he predicts.

Right now all we can do is wait and see.

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