IHG plans to debut its upscale Voco brand in the U.S. with hotel openings in New York City; St. Augustine, Florida; and Columbia, Missouri, by early 2021.
Its U.S. debut continues IHG’s growth strategy by negotiating a deal with the owner of an existing property to take on the Voco brand flag, a transaction known as a conversion. But the conversion field is getting crowded — especially in the upscale, lifestyle space.
IHG first launched Voco in 2018, but growth was concentrated in the UK, Europe, Australia, and the Middle East. Voco was launched as a conversion brand, and IHG remains committed to that growth strategy. Two-thirds of the 28-hotel Voco development pipeline are conversions. All three of the announced U.S. properties are conversions, including the 50-room Franklin Hotel in New York City and the 64-room historic Tiger Hotel by the University of Missouri.
IHG sees Voco appealing to both the leisure and business sectors and targets owners who want “the reassurance of a big brand with the informality and charm of a boutique hotel,” said Julienne Smith, IHG’s senior vice president of development in the Americas, during a press event Tuesday.
“Voco is meant to be a ‘soft brand with hard brand elements’ that could lead to a relatively affordable conversion for hotel owners across a variety of property types. The brand is simply recognized through signage, uniform, collateral, amenities, and artwork — making it a brand that is simple to convert,” she said.
Existing Voco properties included converting the modern, 470-room Nassima Royal Hotel in Dubai as well as the Oxford Thames, a British hotel with some components dating back to the 15th Century.
While IHG is open to new-build Voco projects, development leaders at the company recognize capital is hard to come by for a hotel project that wasn’t already off the ground before the pandemic tanked travel demand around the world.
Conversions — even affordable ones — still take money, something many existing hotel owners are tightly holding onto due to the uncertain demand environment. But Smith said there are still capital sources like PMZ Realty Capital and Peachtree Hotel Group subsidiary Stonehill Strategic Capital willing to invest in hotel rebranding or renovation projects.