BUSINESS travel is making a welcome comeback for the hotels sector while an Asian boom is transforming the business, according to InterContinental Hotels Group finance director Richard Solomons. The executive, speaking to City A.M. at the company’s flagship Park Lane hotel, is ebullient about the prospects for the company which has pumped millions into overhauling its Holiday Inn Brand despite the recessionary hangover felt in the consumer sector.
Solomons, 48, says the recession was an “opportunity” for the business as it helped it focus on its strengths – namely providing the brand, bookings system and marketing for those wanting to buy into the hospitality industry.
The company owns or services more than 4,000 hotels and has a $1bn fund on tap to support owners who purchase a franchise from IHG. “We don’t own many hotels outright. What we do is provide the back-up for others and we have an amazing network to do that. Our Holiday Inn brand needed freshening up and we did it with a massive revamp – one of the biggest ever in the hotel sector. The downturn has helped us to focus on what we are good at,” he says.
The company specialises in mid-scale hotels, although the Park Lane InterContinental is anything but with a suite complete with cinema available for £4,000-a-night. Both business and leisure customers are vital to the success of the group and the former is starting to pick up after a steep decline triggered by the budget cutting of companies reining in spending in the face of world economic mayhem.
“There has been steady improvement from month to month. I do not want to say it too loudly because we cannot take anything for granted. Companies are still working on budgets set in the bad times but the business is coming back”, he says.
However, in Asia the picture is far clearer in that demand is booming; particularly in China where the expanding economy has driven a dramatic demand in hotel rooms for holidaymakers, domestic visitors and business people.
Solomons says: “That place is just amazing. Where there is tarmac hotels will follow and the number of roads and other infrastructure being built in China is just phenomenal.”
The executive is constantly globetrotting to meet the owners of hotels who have bought into the expertise of IHG and check levels of customer service. That included his visit to Park Lane where he admitted he would be running the slide rule over staff.
“I am always watching and thinking of ways to do things better”, he says with a steely look in his eye. Away from the face-to-face side of the business Solomons pins the hopes for expansion on online booking and pushing loyalty offers through the company’s iPhone app. An iPhone user himself, Solomons brandishes his handset and proudly displays the feature. “What we can do online is wonderful and we are investing in this for our business.”
The company is also testing a function where a smartphone could be used as a hotel room key , although it could be a while before the system is introduced.
IHG reported healthy profits in its last quarterly results and Solomons is cautiously optimistic about the next set. “Our investors are happy with us and we have a very focused business,” he said
First-quarter profits to March 31 were $54m (£37.1m), up from $27m a year earlier, while total revenue grew 3.1 per cent to $362m. Operating profit was up 15 per cent to $83m.
CV | RICHARD SOLOMONS
Solomons, 48, is a member of the IHG Board and executive committee. He leads the global finance function for the group and reports directly to IHG chief executive Andy Cosslett. After joining IHG in June 1992, he subsequently held a number of senior roles, including chief operating officer of the Americas hotels division, before being appointed finance director of the company in March 2003. In this role he was responsible for overseeing the separation of IHG from Six Continents in 2003 and the IPO of the firm’s former Britvic soft drinks division in late 2005. A graduate of Manchester University, he qualified as a Chartered Accountant with KPMG in 1985. From there he worked in investment banking for seven years with Hill Samuel (now part of Lloyds Banking Group), including a two year stint in New York. He is married with three children.