Kimpton Hotels and Resorts are some of the most unique, premium hotels in the world – which is why they have no place with IHG.
Kimpton Fills A Unique Market Position
Kimpton, IHG’s smartest acquisition, was purchased to fill a mid-market gap with modern hotels and a cool factor reminiscent of W, Andaz, and Edition. Kimpton focuses on design and plays to a young, affluent crowd though many of their properties are rather affordable. W Hotels is a lot more money for a similar product, Andaz too, but the latter is just a little less loud than W. Kimpton, has the design and, for lack of a better word, sass, of W without the hefty price point.
Kimpton is a small chain (just 1.2% of IHG’s portfolio) upmarket of Indigo, but more accessible than the newly acquired Six Senses.
IHG Is Just Terrible
For all of its faults, IHG has identified its market gaps: luxury, lifestyle, resort – and has worked to bring brands in to fill those gaps. For the top end of the market, Regent was acquired by the hotelier to compete with Park Hyatt, Waldorf-Astoria (Hilton), St. Regis, and Ritz-Carlton (Marriott.) At the time it the 51% stake was purchased, Regent was just six properties; IHG intends to grow it to 40 hotels. For one of the world’s largest chains (6,031 hotels worldwide), a six property entrance into the $60bn luxury hotel market sums up the brand’s approach nicely.
Intercontinental Hotel Group cannot be trusted with the long-term survival of a meaningful loyalty program. Kimpton developed its own, Inner Circle, with great perks and a unique culture. They promoted a “secret word” its members could say at check in that would deliver a Kimpton Inner Circle gift; both the perks and secret word changed quarterly keeping members engaged.
Meanwhile, IHG doesn’t offer late guaranteed 4 pm checkout, free breakfast, nor confirmable upgrades to its most loyal IHG Rewards Club customers amassing 75 or more stays in a calendar year. To get some (but not all) of those benefits you’d need to apply and pay $200 – and that only corresponds to Platinum status.
IHG Rewards Club points have devalued its redemptions over the last few years from 50,000 points as the highest category to trying to sneak in a hike to 120,000 during the pandemic. They ultimately retreated following substantial vitriol from members. The credit card delivers little value when compared with competing brands and they don’t seem to care. It doesn’t help to earn IHG Rewards points if they devalue faster than other programs for hotel stays you rarely want to book anyway.
As much as I dislike Marriott Bonvoy, even that program is more trustworthy and delivers more value than IHG and would be a better home for the brand.
IHG hates its elites. Even as a Business Edge IHG Rewards member, I found little value in the program and virtually no access to Rewards Club Customer Care Center help for large bookings of many guests for an extended period of time.
Why IHG Should Sell Kimpton
IHG has helped Kimpton grow from a few dozen properties to 75 in 50+ cities. Is there a more perfect time to sell? IHG has been able to acquire the brand, add customers (whether they are a good fit or not, more on that below), add value and now can sell a far more mature brand with greater reach.
The reason why other brands are able to grow and build a following with their premium brands is that their offerings are broader. Premium brands at SPG represented a far larger percentage of its portfolio. Hyatt also has a significant amount of their brand coming in above select service categories (Hyatt Place, Hyatt House) and Marriott does a better job of this than IHG. Here’s a great example as to why:
A premium guest who spends time at Intercontinental properties for work in major cities, wants to relax on vacation with her family. In Hawaii, for example, there are just two properties – none of them full service. In Barcelona, all of the choices for IHG are sub $100/night with the exception of the Intercontinental, a Kimpton, and a Hotel Indigo. We find the same limited offerings outside of select service in Rome. A premium business traveler does not want to stay in the Holiday Inn Express Waikiki.
It doesn’t fit with the rest of their brand because it doesn’t fit with their customer base. The majority of customers are Holiday Inn customers (I’m not throwing shade, it was the best hotel in a city I worked in extensively and I earned Spire status because of it) but those are rarely willing to pay the premium for Kimpton. That said, some Kimptons are priced below where they could be with a more premium customer base and marketing that works for those brands.
I really enjoy Kimpton hotels. Each one I have visited delivers a cool factor worthy of a premium. If they were part of a loyalty program where I had a broader range (both up and down lines) I’d be far more likely to choose them as often as possible. The reason I don’t is because there aren’t enough of them to make them my primary chain, and there’s simply not enough other quality brands in a loyalty program that returns value to me. For IHG’s part, they have built up the brand and can turn a profit on the larger product, but Kimpton just doesn’t fit in with the rest of its customer base.
What do you think? Should IHG sell Kimpton? Should it keep the brand and grow it?