Keith Barr was the driving force behind IHG’s growth during his six years at the helm, and here are eight important moments from that time that we’ve covered at Skift.
InterContinental Hotels Group CEO Keith Barr announced he would be leaving his role at the UK-based company at his company’s first-quarter earnings call on May 5.
Barr, who led IHG for six years, cited his family during the earnings call as a major reason he was stepping down as CEO after spending more than three decades in the industry. His decision also came a month after he described the UK stock market as being unattractive for listed companies.
So Skift is looking back at Barr’s time at the helm of IHG, where he served as chief commercial officer for four years before succeeding Richard Simmons in 2017. We’ve already done a feature on his legacy on IHG, and here’s a list of eight important developments during Barr’s reign as CEO, including its expansion in Asia and growth in the luxury sector.
1. IHG Adds Kimpton to Its Loyalty Program
More than two-and-a half years after IHG acquired Kimpton Hotels & Restaurants, IHG announced in October 2017 that it would merge the two companies’ loyalty programs by the beginning of the following year. All Kimpton Karma Rewards were automatically enrolled into the IHG Rewards Club, which was considered the world’s largest hotel loyalty program in terms of membership numbers. Skift had reported that a failure to bring Kimpton’s loyalty members into its portfolio would have represented a huge lost opportunity for IHG.
2. IHG Buys 51 Percent Stake in Regent Hotels
IHG’s move to purchase a majority stake in Regent Hotels in 2018 was a sign of its strategy to target the $60 billion luxury hospitality market. Barr said a more comprehensive luxury portfolio would have “numerous halo benefits, including helping us (strengthen) our loyal (offers) and attracting more (business-to-business) customers.” Skift noted that Regent would comprise a dedicated luxury division for IHG.
IHG also viewed the acquisition of the Taiwan-based Regent as a way to make inroads in Asia, with a majority of Regent’s properties being located on the continent.
3. IHG Beefs Up Luxury Portfolio in the UK
IHG made another foray into the luxury sector when it took over operating 13 luxury and upscale hotels in 2018 after Starwood Capital sold a selection of its hotels to French real estate company Foncière des Régions.
The deal saw an unspecified number of the hotels come under an unnamed IHG upscale brand as part of Fonciere’s agreement to have the company manage the hotels. The transaction also resulted in the first Kimpton hotel open in the UK. The brand only had one hotel in Europe, with the rollout in the UK will likely be the start of greater expansion.
4. IHG Acquires Six Senses in Push to Expand in Asia
IHG’s efforts to grow its portfolio in Asia weren’t limited to purchasing a majority stake in Regent Hotels. It acquired Bangkok-based Six Senses Hotels Resorts Spas in 2019, bringing its portfolio of open and pipeline luxury hotels to 400 hotels with 108,000 rooms globally. Barr had said just before the acquisition of Six Senses he wanted to make IHG more nimble in an increasingly competitive marketplace.
“My aspiration is to have a full robust brand portfolio from the upper end of luxury into mainstream, and we still have some gaps there,” Barr said.
5. IHG Enters Into Loyalty Partnership With Mr & Mrs Smith
IHG adding properties from UK-based boutique hotel booking site Mr & Mrs Smith into its loyalty program not only increased its luxury portfolio, it doubled the number of luxury hotels to which its loyalty members had access to. Skift reported that despite buying Six Senses and acquiring a sake in Regent Hotels, its luxury footprint was relatively small compared to other industry giants.
6. IHG Pandemic-Era Struggles Forces Cost Cuts
Although Barr attempted to downplay the impact of Covid early in 2020, IHG was far from immune to damage caused by the pandemic. The company announced $150 million of cost costs to help deal with travel restrictions and lockdowns. IHG said it expected its global revenue per available room, a critical metric in the hotel, to fall 60 percent in March 2020 in addition to steeper drops in markets that had gone to lockdown.
IHG Hotels & Resorts reported Friday its third straight quarter of essentially no net expansion to its global portfolio. But one company leader emphasized growth is just around the corner.
The company behind brands like InterContinental and Holiday Inn is still opening rooms — nearly 30,000 so far this year — but enough hotels are exiting the IHG network where the company hasn’t seen any annual net growth in recent quarters. New room signings in IHG’s Americas region are roughly half of 2019 levels.
In addition, IHG reported during its third quarter earnings call in 2021 that it recorded its third consecutive quarter of essentially no net expansion to its global portfolio.
7. IHG Expands in China
Barr argued in February 2020 that despite China being a big focus area for IHG, the country was still a relatively small part of its revenue mix. But the pandemic didn’t slow down its plans for growth in the market. IHG signed a management agreement with Shanghai 21st Century Hotel Co. to open Regent Shanghai Pudong, the first new Regent hotel since IHG obtained a majority stake in Regent. Regent Shanghai Pudong opened in May 2020.
IHG revealed in its annual report in March 2022 that Greater China, a term that encompasses Mainland China and the special administrative regions of Hong Kong and Macau, was the only of IHG’s three regions to see an increase in the number of properties.
Although Skift reported that IHG’s focus on China might be puzzling to some observers, considering the region had been performing poorly, Barr was adamant that the company would continue to emphasize expanding in China.
“We run this business for the long term, and I wouldn’t stop investing in China,” Barr said.
8. IHG Significantly Revamps Its Loyalty Program
IHG announced in April 2022 that it was making major changes to its loyalty program, including inviting its most frequent guests to choose their favorite perk from several reward types. The company said those modifications were part of its strategy to keep costs down for owners of its more than 6,000 franchised properties.
Keith Barr at Skift Events
Outgoing IHG CEO Keith Barr joined Skift on stage at Skift Global Forums in 2022, 2020, and 2017. The conversations are in full, below.