While Rivals Cut Fees, IHG Takes a Different Route on Owner Economics
As major hotel competitors slash fees to support franchise owners, IHG is reshaping a bundled service package to lower operating costs instead.
Stock photo for illustration only, not from the actual event
- IHG is bucking the industry trend of fee cuts and financial rebates for hotel owners.
- The company is offering a redesigned bundled services package covering digital, web design, and group bookings.
- The program is currently piloted across over 500 hotels and expands system-wide in the Americas this year.
- CEO Elie Maalouf highlights strong Essentials and Suites brand portfolios and solid RevPAR growth as key differentiators.
During the recent earnings season, major hotel groups rushed to cut fees and offer concessions to ease financial pressures on property owners. However, IHG has chosen a distinct path by redesigning a comprehensive package of operational services to help franchisees reduce outsourcing costs.
The bundled program grants franchisees access to essential services they would otherwise need to outsource independently, such as field marketing, digital assistance, web design, staff training, and group booking coordination, positioning the initiative as providing more value for less expense.
IHG has already piloted this program across more than 500 properties in the Americas and plans to roll it out system-wide across the region later this year before expanding internationally.
Stock photo for illustration only, not from the actual event
Speaking on the company's second-quarter earnings call on Tuesday, CEO Elie Maalouf noted that the pilot program has performed exceptionally well in saving properties money, though certain competitive metrics are being kept confidential.
“It’s performing very well, saving the hotels money. We’ll come back with some statistics, but there’s also confidentiality and competitive advantage that we want to maintain.”
Elie Maalouf
IHG's strategy highlights how hotel portfolios heavily weighted toward midscale and extended-stay brands (with 85% of its Americas portfolio in Essentials and Suites) experience different market dynamics than luxury urban properties. This resilience, combined with robust loyalty metrics and preparation for conversational AI search platforms, allows IHG to bypass broad fee cuts while maintaining strong owner relations and competitive positioning.
Maalouf pointed out that 85% of IHG's Americas portfolio consists of Essentials and Suites brands, which have lower exposure to expensive urban markets and benefit from steady industrial demand. He also cited a 4.8% increase in Americas RevPAR for the first half of 2026, a loyalty program generating 73% of U.S. room nights with 160 million members, and ongoing investments in an AI-ready content platform to capture bookings driven by emerging conversational search tools.
Source: Skift
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