IHG Hotels extends franchise model in China to Crowne Plaza brand as it chases expansion

The company said on Monday that it would seek Chinese operators for Crowne Plaza, Holiday Inn and Holiday Inn Resort hotels, after a successful trial of the franchise model for the budget Holiday Inn Express brand.

“This new franchise model is an addition to our proven and successful management model in the market. Both are important to us and they will address different owner types and needs,” said Jolyon Bulley, who took on the role of CEO for IHG in Greater China this month.

“IHG has confidence in the maturity of the industry and the sophistication of Chinese owners, and believes that the market is ready for the franchise model,” said Bulley, speaking in Beijing at the official launch of the franchise expansion plan.

Under the franchise model, IHG provides licences to franchisees, allowing them to operate hotels under the IHG brand name. The franchisees are responsible for the operation of the hotel while IHG provides regular audits and training to ensure its standards are met.

The model is common in developed markets, with over 80 per cent of IHG’s around 5,300 hotels globally operating under franchise models. But in developing countries many hotel brands have been hesitant to adopt the model because of concerns over substandard service from third-party operators.

IHG has been operating a franchise model for its Holiday Inn Express brand since last May in a trial. It said the model had proved quite popular with Chinese owners, with 68 deals signed and six hotels already open.