Last week BTiQ Expert Mike Prager told us that mid-market properties were disappearing. This week his one-time employer, IHG, announced plans at its Owners Conference in Las Vegas to start a new mid-market brand.
Any examination of whether there is a newfound appetite for mid-market hotels should start with clarifying what we're talking about. Just like the historical hotel star ratings, there is no precision around the definition of mid-market. There is, however, a perception that any property so described is in a market that supports both more and less expensive properties, in other words it's usually sandwiched between luxury and budget.
But what is luxury in one market might not be considered so in another and the same goes for budget hotels.
The casual onlooker can be forgiven for wondering if IHG's new brand, planned initially for the US, is indeed mid-market or instead what some might call 'budget'. According to IHG all hotels will be new builds and, on average, cover 1.5 acres and will have 95 to 100 rooms and three stories. In addition
- Rooms are expected to be $10-$15 cheaper per night than Holiday Inn Express
- Rooms will have beds with "high-quality" mattresses and linens as well as a built-in work space, open closet storage with luggage shelf, a shower and a smart TV
- A complimentary breakfast will be offered that travellers "can grab and go or eat in the lobby"
"It's a product for the everyday traveller who wants a good, clean, quality stay," CEO Richard Solomons is quoted as saying. "They're not looking for any excess. They're people who are careful about how they spend their money."
We believe that business travel managers are also careful about how they spend money.
Solomons also insists that IHG's research shows that many people want such properties. He admittedly is talking about both leisure and business travellers while our focus is limited to the business market. The point that Prager made last week perhaps explains why business travellers want mid-market hotels without knowing that they do.
When the so-called lifestyle/boutique/design hotels were launched their rates were implausibly attractive and, not surprisingly, they went from being specialist market to enjoying wide popularity. Over the years room rates have risen to reflect this popularity. Some could even be mistaken as luxury properties although others can certainly be described as budget in price and product although not the cheap, high volume, mass-market companies we usually find.
The growth of this kind of property has been attributable to two factors: demand for value for money and travellers' increasing taste for authentic experiences.
As IHG has rightly recognised, the demand from both buyers — and their travellers — for mid-market properties that give value for money has never really gone away. We just tend to call them something else.