IHG CEO says he’s not de-prioritising AMEA

InterContinental Hotels Group (IHG) CEO Keith Barr said he is not de-prioritising AMEA with his move to create a new mega region that combines AMEA with Europe based in the UK.

In fact, he wants to bring resources closer to the markets, Barr said in a phone interview from London.

 

Barr wants to enable markets be more independent when it comes to making decisions, in order to drive performance

The intention, according to Barr, is not to have a big office in Europe running the business but “to have more resources going into the markets close to the hotels and owners (and) to enable the markets have more autonomy and be a bit more entrepreneurial to drive performance. So we’re moving resources around while maintaining centres of excellence on development, luxury, F&B, operations, in Asia.”

Barr recounted that was how he ran Australia/New Zealand/South Pacific years ago. “I was a fairly independent business; I wasn’t dependent on Singapore. I had development, sales & marketing, revenue management, I ran my own business, and I had the ability to make decisions on how we partner, how we negotiate a deal, and that’s what I want to see. I want to empower southern Asia, India, and so forth. Sure there are some things we can’t do from a back office perspective such as finance or HR which are more process-related.”

He’s looking at how best to structure EMEAA on a market basis, he said. Macpherson will have accountability for the overall strategy of EMEAA, and there will be leadership in each of the markets who will be accountable for operating the hotels, opening hotels, growing the business. “We’ll work through who should be in those roles going forward. We have a number of people in place and we have to look at which other leaders we want to have in place going forward,” he explained.

He reiterated: “There’re going to be resources in Singapore, it’s a huge important part of the world for us. There will be resources in other important markets for us and we’ll be more focused on putting resources in markets that have the highest potential, based on pipeline, relationships with have with owners and our competitive positions too.”

Asked why this model is relevant for IHG today, Barr said: “The business has got scale now. Where we didn’t have scale in many of those markets in the years past, it did make sense to do everything out of Singapore. But now that we have scale in those markets, the best way to drive performance for owners is to grow more resources in those markets.”

Each market, he reminds, is fundamentally different. Australia/New Zealand has lots of institutional funds compared with southern Asia, which has lots of high net worth individuals, managed luxury and upscale business, he points out. “So no one size fits all,” he said. “I want to make sure we’ve got the right go-to-market strategy.”

Regions are just constructs that companies make, says Barr. What’s important is “how to ensure we have the right operating model in the markets and not be constrained (by traditional ways), how we look at using technology, new ways of working and leveraging our scale”.

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