Top 250 Franchise by Entrepreneur – Rank no.42 – IHG (InterContinental Hotels Group)- US
Products & Services: Hotels
Number of Locations: 4,643
Total Investment: $5.15M – 93.86M
Began Franchising: 1954
About IHG (InterContinental Hotels Group)
InterContinental Hotels & Resorts started abroad as a subsidiary of Pan American Airlines, which sold the company in the 1980s. In 1988, the U.K.-based brewery Bass purchased Holiday Inn International, which was founded and began franchising in the 1950s. The company has since sold the brewery and franchises seven hotel brands across six continents. Their hotel brands are Candlewood Suites, Crowne Plaza Hotels and Resorts, Holiday Inn, Holiday Inn Express, Hotel Indigo, InterContinental Hotels and Resorts, and Staybridge Suites.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $50,000 – $75,000
Ongoing Royalty Fee: 5-6%
Term of Franchise Agreement: 10 years (average), renewable
|FINANCING TYPE||IN-HOUSE||THIRD PARTY|
How This Franchise Supports Franchisees
Franchise Ranking History
|Type||Public Limited Company|
|Traded as||NYSE: IHG LSE: IHG|
|Founded||15 April 2003 (origins trace back to 1777)|
|Headquarters||Denham, Buckinghamshire,United Kingdom|
|Key people||Patrick Cescau (Chairman)
Richard Solomons (CEO)
|Revenue||£1,835 million (2012)|
|Operating income||£614 million (2012)|
|Net income||£545 million (2012)|
|Employees||7,981 (excluding franchises)|
Holiday Inn Express
InterContinental Hotels Group PLC informally InterContinental Hotels or IHG is a British multinational hotels company headquartered in Denham, UK. It is the largest hotel company in the world measured by rooms (with 675,982 as of December 2012), and has over 4,600 hotels across over 100 countries. Its brands include Candlewood Suites, Crowne Plaza, Even, Holiday Inn,Holiday Inn Express, Hotel Indigo, Hualuxe, InterContinental and Staybridge Suites. Of the 4,602 hotels, 3,934 operate under franchise agreements, 658 are managed by the company but separately owned, and 10 are directly owned.
The origins of InterContinental Hotels Group can be traced back to 1777, when William Bass established the Bass Brewery in Burton-upon-Trent. In 1876, its red triangle trademark was the first registered in the United Kingdom.
In 1989, the British Government limited the number of pubs which brewers could directly own, resulting in Bass investing in the expansion of its small line of hotels. In 1990, it purchased Holiday Inn International from Kemmons Wilson and expanded into North America.
Pan American Airways founder Juan Trippe established the InterContinental brand as a division of PanAm and opened the first hotel inBelém, Brazil in 1946. In 1981, holding company InterContinental Hotels Corporation (IHC) was sold to UK-based company Grand Metropolitan. As GrandMet focused its core business and expanded into fast food through the purchase of Burger King, it sold IHC to Japanese based Saison Group in 1988.
In March 1998, Saison Group sold IHC to British brewery Bass, which traces its roots back to 1777, when William Bass established the Bass Brewery in Burton-upon-Trent. In 1988, in reaction to the British government limiting the number of pubs which brewers could directly own, Bass invested in the expansion of its small line of hotels. In 2000, Bass sold its brewing assets (and the rights to the Bass name) to the major Belgian brewer Interbrew for £2.3 billion and changed its name to Six Continents.
In 2003, the independent corporation InterContinental Hotels Group (IHG) was created after Six Continents split into two companies: Mitchells & Butlers took control of the restaurant assets and IHG focusing on hotels and soft drinks. IHG retained Britvic, the soft drinks division, until December 2005 when it sold its interest in the company by aninitial public offering.
IHG is primarily engaged in managing hotels owned by other parties and in franchising its hotel brands. That is, it sells its expertise in hotel management, systems, and marketing, while leaving investment in real property, which is far more capital intensive, requires different skills, and has a different risk profile, primarily to its partners. This is not an unusual arrangement in the hotel industry. The 10 company-owned hotels include many key properties of company’s flagship InterContinental brand.
IHG currently operates and/or franchises hotels in the following countries:
- Candlewood Suites
- Crowne Plaza
- Holiday Inn Hotels & Resorts, the number two hotel brand in the world by number of rooms
- Holiday Inn Club Vacations
- Holiday Inn Express (formerly known as Express by Holiday Inn in Europe, Middle East, Africa, Asia Pacific and South America)
- Hotel Indigo
- Staybridge Suites
IHG Rewards Club
IHG Rewards Club is IHG’s worldwide loyalty program, which replaced Priority Club Rewards in July 2013. The loyalty scheme was first introduced in 1983, and now has 74 million members around the world.
The Crowne Plaza Liverpool John Lennon Airport is the former terminal building of Liverpool Speke Airport, constructed in the 1930s and used until 1986. Its notable art deco features led to its listing as a heritage building, and subsequent adaption as a hotel.