InterContinental Hotels Group has started licensing in the U.S. for its new midscale brand, Avid. IHG previously kept
the lid on the name of its 13th brand,
referring to it instead as Project Horizon
since it was first announced in June.
IHG’s decision to launch a midscale
brand comes as U.S. hotel supply growth
overtakes demand growth in the segments from upper-midscale up to luxury.
Demand growth for midscale, in contrast,
grew 1. 8 percent in July, outpacing the 1. 1
percent supply growth, according to STR.
The segment also commanded greater
revenue per available room growth, 2. 4
percent, than the higher chain scale segments. Other companies that have added
midscale products include Hilton with its
new Tru brand Wyndham Worldwide,
which acquired the AmericInn brand in
July, and Trump Hotels, which announced
its American Idea brand in June.
“With 14 million potential customers
looking for the type of hospitality Avid
hotels will offer, this new hotel brand
represents a significant growth opportunity for IHG and our family of owners,”
IHG CEO Keith Barr said.
The Avid brand is described in IHG’s
marketing materials as a “a straightforward hotel for straightforward people”
with “the essentials done exceptionally
well.” IHG expects the price point to be
$10 to $15 cheaper than IHG’s Holiday
Inn Express. It will feature public spaces
for socializing and work, complimentary
breakfast, a food marketplace and high-speed Wi-Fi from IHG Connect.
New 2018 forecasts for the U.S. hotel industry project continued
growth, though at a slower pace than in recent years.
CBRE’s most recent forecast pegs 2018 average daily rate
growth at 2. 3 percent and, despite a projected imbalance in
supply and demand, predicts occupancy will edge up 0.1 per-
cent year over year. “The limited growth rates may be disap-
pointing or even troubling for some industry participants,”
said Mark Woodworth, senior managing director of CBRE Ho-
tels’ Americas Research. “However, 2018 will mark the ninth
consecutive year of rising occupancy, something we have not
seen since the 1990s.”
PwC, meanwhile, projects 2018 ADR will grow a more modest
2. 1 percent year over year and occupancy will decline 0.1 per-
cent. The forecast anticipates both supply growth and demand
growth will peak during the first quarter of 2018 and taper out
for the remainder of the year. PwC predicts supply will crest at
1. 9 percent and demand at 1. 8 percent.
STR forecast ADR will grow 2. 5 percent and occupancy will
decline 0.2 percent. It projects supply growth of 2. 1 percent and
demand growth of 1. 9 percent.
The outlook for the industry continues to be marked by uncer-
tainty related to consumer confidence, employment levels, GDP
growth and U.S. governmental policy. Additionally, rising labor
costs are expected to continue to weigh on hotel profit margins.
“In a low revenue-growth environment, it is a struggle to grow
profits,” Woodworth said. “This is especially true given the labor
shortages and resulting upward pressure on compensation rates
that our clients are reporting to us.”
CBRE projects revenue will increase 2. 3 percent, but at that
rate, expense growth would need to stay below 3. 7 percent in
order for profits to rise, Woodworth said. “With the average
hourly compensation rate for hospitality employees currently
increasing at a pace of 4. 1 percent and labor costs comprising
roughly half the costs of a hotel operation, you can see how the
math becomes challenging.”
Nevertheless, Woodworth said, the challenge is not a new one
for hoteliers, and he expects hotel operators will be able to man-
age costs in order to grow profit once more in 2018.
Online hotel booking tool Travelport Hotelzon has introduced a consolidated payment and invoicing service to
guarantee hotel acceptance of virtual cards and provide
monthly tax-compliant statements for corporate clients.
Hotelzon’s Payment Consolidation Service debuted in
the U.K. at the beginning of September and will roll out
to other European markets over the next few months,
According to Travelport, its clients spend an average
of 24 minutes of manual admin on each hotel booking.
Hotelzon head of new market sales Christian Schultz
said the Payment Consolidation Service addresses two
pain points. One: “Many customers use virtual credit
cards, but very often, hotels are reluctant to accept them
when there isn’t a physical card.” Payment Consolida-
tion Service contacts the hotel to let it know it is about
to receive a virtual payment.
The second challenge, said Schultz, arises if travelers’
companies do not receive copies of hotel invoices, either
directly from the hotels or indirectly via the travelers;
even when companies do obtain them, they’re not set
out in a manner that will be accepted by tax authorities.
Payment Consolidation Service collects invoices for all
hotel bookings made through Hotelzon, verifies they are
presented correctly and consolidates them into a single
statement for the client.
Travelport launched the product with
German invoice management specialist
Itelya Business Services and corporate
payments provider AirPlus International.
Both of these companies partnered with
HRS to launch a similar service called Pa-perless Travel in 2016. Schultz said Travelport will expand Payment Consolidation
Service to include payments through
Travelport’s own eNett subsidiary and
other virtual payment providers.
Travelport acquired Hotelzon from its
Finnish founders in 2014. Since then, Hotelzon has extended account management
beyond northern Europe to the rest of Europe and, in 2017, into the U.S. Fifty-five
percent of Hotelzon’s revenue derives from
direct corporate clients and the rest from
travel management company partnerships.
Hotel Booking Tool Offers Payment & Invoicing
BY AMON COHEN
How Much Hotel Metrics
Will Change in 2018
Occupancy Supply Demand
CBRE PWC STR
U.S. Hotel Industry Forecasts
Project Modest Growth for 2018