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The year of resilience
September 2016 2075

Evpar from Middle East hotels continues to go down for the second quarter of the year, as reported in the 2016 Interim Results Announcement by InterContinental Hotels Group (IHG). 'Performance outside the Middle East continued to be strong, with 4.3 per cent RevPAR growth overall. India was up 10.5 per cent, Japan and Australia up mid-single digits and South-East Asia up low-single digits. In the Middle East, RevPAR was down 8 per cent due to the ongoing impact of low oil prices. An increasing mix of new rooms opening in developing markets meant that total RevPAR was down 1.8 per cent in the half.'

But the overall regional outlook for the year remains positive, it emerges in an interview with James Britchford, vice-president of sales and marketing, India, Middle East & Africa.

'Sure, this year has plenty of uncertainty, but despite that IHG is very committed to developing brands in the Middle East. We’ve been operating in the Middle East since 1961, becoming one of the region’s first international hotel groups, with the opening of the InterContinental Phoenicia in Beirut. We have a legacy, a history and an in-depth knowledge of how to operate in the Middle East.'


GROWTH PIPELINE

'If you see our pipeline, in the next three to five years, we are looking to grow our room count by 40 per cent in the region.' The group operates 78 hotels in GCC, Levant, and Egypt alone, and has 25 hotels in the pipeline.

'We have a strong focus on the mid-scale brands, given that only 4 per cent of hotels in that sector are branded hotels in the Middle East, so the room for growth is unprecedented.' Many GCC states are addressing the lack of affordable options for low-budget and family travellers. Dubai, in particular, is seeking to triple its annual tourism income to $82 billion by the time the Expo rolls around in 2020 – a huge increase of affordable leisure and business offerings will be needed to address the inevitable influx of visitors.

'To give you an example, we’ve got the Holiday Inn Makkah Abraaj Al Tayseer in Saudi Arabia, with 5,154 rooms, is the largest Holiday Inn in the world. We are also opening an Indigo hotel in Dubai Sustainable City, our boutique brand, first fully sustainable hotel in the UAE. We also have the InterContinental Fujairah coming in. This will be our first InterContinental resort in the UAE. We are very focused on the InterContinental brand, as the demand for personalised luxury is absolutely still there.'

Of the 25 properties on the horizon, 11 are in development in the UAE. Saudi Arabia has the second-largest pipeline: IHG is committed to the Kingdom, following the call from the Saudi Commission for Tourism and Antiquities to attract 45.3 million tourists a year by 2020. In 2013, just 14 million visitors arrived in Saudi Arabia, but with plans to develop 50,000 additional hotel rooms and 74,000 new furnished apartments, IHG believes it can contribute to its positive growth.


LOYALTY COUNTS

IHG says one of its key pillars of success is its IHG Rewards Club, and has reiterated an effort to continue improving its loyalty programme.

'Our loyal members contribute up to 40 per cent of our bookings, and are certainly our most valued customers. Of our bookings, 60 per cent stem from our business customers – 20 per cent of which are Mice customers.

'We always look forward to welcoming new members to our loyalty programme, and will continue to ensure it’s as valuable and rewarding as possible. We have developed one of the leading mobile bookings apps, produced a website that supports 13 languages, including Arabic and created a loyal global community of 92 million Rewards Club members.'

Research suggested just a 5 per cent increase in customer loyalty can result in a 25 to 85 per cent increase in profit. IHG has committed to building on its current rewards programme by focusing on customers’ most important demand; the perfect balance of inclusivity and individuality. The group revealed that members are four times more likely to post online reviews and six times more likely to book through a direct IHG channel. Moreover, they account for a third of all Middle East, Africa and Asia room revenues.


BOOKER PROMOTION

Last year, the group launched IHG Business Rewards, its global bookings programme offering rewards on all qualified business bookings for guest rooms, meeting rooms and events. Last month, a new IHG Business Rewards promotion was announced, offering members the opportunity to earn 50 per cent extra bonus points at participating IHG hotels worldwide. These points can be earned when booking accommodation, meetings and events for others on qualifying spend of up to the value of $20,000 from September 1 to November 30, 2016 for events and stays until August 31, 2017.

Once a member has a qualifying spend of $20,000, they will revert to earning three points for every $1 of additional spend as per the programme’s general terms and conditions.

In addition to the promotional bonus points earned, members can also capture more value by earning an extra 10,000 and 20,000 additional points for one-off individual bookings of $10,000, and $20,000 respectively. There is no limit on the number of high-value bookings that may be made, and additional points will be received for each individual, one-off high value booking.

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