COO interview: Pascal Gauvin

It’s been four years since Pascal Gauvin took on his current role as chief operating officer of India, Middle East and Africa, after having joined InterContinental Hotels Group (IHG) in 1993. And the fruits of his labour are being realised with IHG now expecting to record more than 40% growth across the Middle East in the next three to five years, with 25 new hotels in the pipeline.

Currently, the group operates 78 hotels in GCC, Levant, and Egypt alone, and added five new hotels to its operating portfolio in 2015, including the world’s largest Holiday Inn in Saudi Arabia with 5,154 rooms.

Of the 25 properties on the horizon, 11 are in development in the UAE: three InterContinental, three Crowne Plaza, one Holiday Inn, two Staybridge Suites, and two Hotel Indigo hotels. Saudi Arabia has the second largest pipeline, with one InterContinental, one Crowne Plaza, three Staybridge Suites and one Hotel Indigo.

Speaking to Hotelier Middle East, Gauvin, who has 35 years of hospitality experience, says: “We are continuing to grow, which is very important. We have 78 hotels in the Middle East today, and we will grow by another 25 hotels in the coming three to five years, which is 40% growth — it is great to bring our brands across the region.”

Gauvin points to the Hotel Indigo brand which has been signed for the UAE and Saudi Arabia, and says the projects are progressing well — these include the 209-key Hotel Indigo Riyadh King Abdullah Financial District, the 285-key Hotel Indigo Dubai Business Bay, and the 170-room Hotel Indigo The Sustainable City.

In addition to the boutique hotel brand, the UAE is also going to welcome the InterContinental Fujairah Resort in the next 18 months. Gauvin adds: “This is the first time that we are bringing an InterContinental resort to the country, which is really great.”

Gauvin cannot help but discuss the mid-market brands that are also seeing, he reports, massive traction in the region. “Although our pipeline is still luxury with InterContinental, and upscale with Crowne Plaza, we see a large demand for the mid-scale market — you can see the demand for Holiday Inn and Staybridge Suites coming.”

Not just focusing on the UAE, Gauvin re-asserts IHG’s commitment to Saudi Arabia, following the call from the Saudi Commission for Tourism and Antiquities to attract 45.3 million tourists a year by 2020. He tells Hotelier: “The Saudi Arabia tourism board has told us they want to open for tourism. All that is music to our ears because we are the largest operator in Saudi Arabia with 24 hotels and we are growing really fast, especially in Makkah and Madinah.”

Holiday Inn will be a focus for IHG in this region, as Gauvin is keen to target the domestic market and the tourists who may not be able to afford luxury brands. To that end, IHG has signed a master development agreement with Dur Hospitality in 2014, and has opened a property in Tabuk and signed a further contract in Jubail.

“The map of Saudi Arabia is becoming full of Holiday Inns, especially in secondary cities. We have been in Riyadh and Jeddah for a long time already,” says Gauvin.

He also says the Staybridge Suites long-stay brand is ripe for development. At the end of 2014, Staybridge Suites Dubai World Central was signed, and will become the first franchised property under the brand in the Middle East, along with properties pencilled in for Saudi Arabia.

With the aggressive expansion plan for IHG in this market, Gauvin highlights two important elements allowing the operator to stand out in a crowded hotel market — its proprietary reservations system and its loyalty programme.

With the latter, Gauvin says: “For us, loyalty programmes are absolutely essential; 40% of our bookings are from our loyal guests.” And with 23,300 rooms already in operation across nine countries in the Middle East, he says one of IHG’s key pillars of success is its IHG Rewards Club. Currently, the operator has a global community of 92 million Rewards Club members, which account for a third of all Middle East, Africa and Asia room revenues.

In a company statement earlier this year, IHG vice president of sales & marketing, India, Middle East & Africa James Britchford revealed that out of these bookings, 60% come from business customers, 20% of which are from the MICE segment, highlighting the importance of business travel for the brand. Last year, the group launched IHG Business Rewards, its global bookings programme offering rewards on all qualified business bookings for guest rooms, meeting rooms, and events.

Gauvin continues to talk about the reservations system. IHG is well known in the travel industry for the launch of its proprietary reservations system Holidex in the mid-1960s. But that system is going to be phased out in 2017, as the operator is working with Amadeus to develop a Guest Reservation System (GRS), which will be cloud-based and eventually connect all IHG hotels. The GRS can be operated alongside Holidex, and the transition to GRS, which is due to be rolled out globally in 2017, will be undertaken in phases to minimise risks. He says: “People [go to] a global brand for the reliability but when they arrive at the hotel, they want personalised service.”

The GRS is something he believes will further help the hotel brand in this endeavour. “It is going to give us the opportunity to know our guests’ behaviour even more. Knowing where they have stayed before, what they think of our hotels, and so on, will really make it easier for us to make their stay absolutely perfect. And this is what we are obsessed by: perfection in delivery of our brand.”

And with GRS, “every hotel of the IHG world will be linked together” according to Gauvin. He gives the example of a guest staying in New York who will travel to the UAE the next day.

“I can have all this information, give the guest the room that they like, know which channel they want to watch in their room, and we will know what temperature to set the room at,” he says.

Gauvin adds: “We need to be a bit more forward-thinking and understand that the hotel business is not just a simple room that you sell. [The experience] has to be better than everywhere else, and better than home.

“I’d say that 30-40 years ago, every hotel offered better technology and better rooms than home. But today that is not true. People have almost all the technology, so we need to be creative and inventive to make sure we make people’s stays absolutely unique, personalised and very different. If you can bring all what people need, why would they go somewhere else?”

About Kimpton

In early 2015, IHG completed the acquisition of boutique hotel operator Kimpton Hotels & Restaurants, in a deal worth US $430 million. At the time, Kimpton Hotels & Restaurants managed 62 hotels in cities and resorts across the US, as well as 71 hotel-based restaurants and bars. It was only limited to the US, but the first international Kimpton property is scheduled to launch in Amsterdam in 2017. What about the Middle East region? IHG COO IMEA Pascal Gauvin is hopeful. He says: “Europe is starting the internationalisation of that brand and we will do the same as soon as we have the opportunity and we have the right partner.”

Hotel food and beverage

IHG COO IMEA Pascal Gauvin says food and beverage is an important element for IHG, and while the revenue split varies, overall 40% of the operator’s business is from food and beverage.

“With this, I will think about guest experience. We own the food and beverage including the all-day dining and we need to always concentrate on great breakfasts. We should do outlets when we have the know-how, but not hesitate to bring partners,” says Gauvin, and points to Pierre Gagnaire’s restaurant at InterContinental Dubai Festival City, Jason Atherton’s involvement at the InterContinental Dubai Marina, as well as the Belgian Beer Café outlets at Crowne Plaza Dubai Festival City, InterContinental Abu Dhabi and InterContinental Doha. “Sometimes hoteliers believe we know how to do everything. We have to relax — we have to concentrate on the core business and do it absolutely perfectly, and when you can be associated with others to really transform the guest experience, don’t hesitate,” he concludes.