Intercontinental Hotels launches new budget chain

No-name brand will focus on sound sleep and the latest technology for its guests

IHG plan to focus the new brand on high quality basics

Intercontinental Hotels Group (IHG) plan to launch a new midscale hotel chain to provide the basics “exceptionally well” - for less than its budget Holiday Inn Express brand.

The company want to tap into an estimated $20 billion market for travellers they believe is “vastly under-served” by the current market. Looking at the announcement, that seems to equate to a slightly younger audience who flies budget airlines. There is none of the deliberate trendiness of other chain's millennial-focused brands; instead, IHG is selling this as providing a solid hotel room at a budget - without the cheap connotations of a Holiday Inn.

The as yet unnamed brand - which has been given the working title "Project Horizon" - will be the 13th for the group.

IHG says that it will focus on “rooms designed for sound sleep” with high quality mattresses and linen, noise reducing design and climate control. It is also investing in technology with a cloud-based booking system, mobile check-in and check-out, and smart TVs that will allow you to stream content from your own devices. The complimentary breakfast will be simple but offer brand name options and “premium coffee”.

The Project Horizon launch video claims the brand is “the future of everyday travel” which will focus on quality and price being “just right” - which translates as around $10-15 less per night than Holiday Inn Express.

IGH plan to release the name and logo later this year with construction on properties starting in early 2018 and opening in 2019. It will initially focus on the US market.

Elie Maalouf, Chief Executive Officer of IHG Americas, said of their aim to attract a new type of guest: “These travellers will often spend hours researching hotels to find a great and affordable lodging experience in this segment. When they can’t find it, they compromise, accepting lower standards and an inconsistent experience to get the price they want.

“We will change that with this new brand by delivering a superior guest experience that doesn't currently exist at this price point.”

The brand seems to be targeting middle class travellers who book low-cost flights according to Makarand Mody, Assistant Professor of Hospitality Marketing at the Boston University School of Hospitality Administration. Speaking to Skift, he said: “Those individuals and families who are just beginning to vacation abroad require something similar in terms of their accommodation choice, which I don’t think any hotel brand owns right now.” Mody however does not think the brand currently appeals to the millennial traveller as its offers nothing “unique” or “experimental”.

The midscale hotel market is a lucrative one and IHG are following in the footsteps of Hilton, who opened their first Hilton Tru property in Oklahoma City last week. The Trump group also announced its intention to move into the space with its Scion brand which hopes to open its first hotel in Cleveland in early 2018.