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IHG launches Vignette, its new luxury hotel ‘collection’ brand

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As teased two weeks ago as part of its half year financial results, IHG will soon have its own version of Hilton’s Curio, Marriott’s Autograph or Hyatt’s Unbound Collection.

The brand is now live and will be called ‘Vignette’.

Here’s the logo:

Vignette – and Hilton, Hyatt and Marriott’s own versions of Vignette – all target upmarket hotels which want to remain independent but wish to become part of a ‘marketing system’. In return for IHG funnelling them bookings via ihg.com, the hotels agree to join IHG Rewards and to honour member benefits.

The hotels keep their existing branding and the senior hotel management will not become IHG employees.

Here is the rest of the IHG brand portfolio:

IHG hotels launches Vignette brand

The first two Vignette hotels have been signed

IHG has two hotels already lined up to join Vignette, although you are unlikely to get to either of them in the near future.

Hotel X is in the centre of Brisbane’s Fortitude Valley, Australia. To quote:

“Hotel X’s distinctive design and luxurious facilities celebrate this iconic Brisbane neighbourhood through ultra-cool art, Avant Garde lighting and exceptional views of the cityscape.”

Hotel X does look like an impressive hotel, and will hopefully set the standard for those that will follow. Brands tend to suffer dilution as they chase growth – Marriott recently added a number of very average all inclusive resorts to Autograph, for example. We also recently saw Radisson RED taking over a former Travelodge outside Gatwick, which is hardly in line with its ‘funky city centre destination’ ethos.

In Asia, Thailand’s Pattaya Aquatique hotel has also signed. The hotel is a new build and will not open until 2024. This is not a new announcement – the owners had already said that it would be part of IHG, albeit with no brand agreement.

To be honest, it would be good to have seen a longer list of launch properties, especially as the one that is open is in Australia.

IHG launching a luxury hotel collections brand

There is no announcement about Ambassador integration

As IHG has added Kimpton, Regent and Six Senses in recent years, InterContinental’s Ambassador loyalty programme – which has a $200 annual fee – has begun to look a little lost.

Kimpton has retained its Inner Circle programme whilst Ambassador benefits are not consistent across Regent and Six Senses.

IHG now needs to decide how to handle the 100+ luxury hotels it believes that its new ‘collections’ brand will bring into the fold.

I don’t think IHG will be rushing to give up the revenue that Ambassador generates, but at the same time it needs to become a programme which sits equally well across InterContinental, Regent, Six Senses and the new brand. The conversion of InterContinental Hong Kong to Regent Hong Kong next year may be a trigger as the hotel risks losing revenue from Ambassador members to the other InterContinental in town.

Conclusion

I am a big fan of Hilton’s Curio Collection and Marriott’s Autograph Collection. Some hotels in Hyatt’s Unbound Collection are also on my wish list.

Whilst neither of the two hotels announced today are hugely relevant for HfP readers, it will show the industry that Vignette has legs and hopefully encourage further signings. IHG is planning to add roughly one hotel per month over the next decade.


IHG Rewards update – September 2021:

Get bonus points: IHG Rewards is not currently running a global promotion.

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Comments (41)

  • Simon D says:

    How does this sit with the presence of (some) Mr & Mrs Smith hotels in the IHG system?

    • Rob says:

      A lot of these are really small. The bigger ones may get a call from IHG if IHG is already sending them business.

  • Tim says:

    My take on this is that if – and that is a big if – global tax rules do move in the direction of what is currently on the table, many of these hotel brands will not be as viable as they currently are in future years, if their effective costs are increased from around 2% to around 15% by being part of the IHG family. That’s from the tax side. And assumes of course, that what has been agreed, is actually implemented. And that there are no workarounds, which there will be. And a change of U.S. administration in a few years could kill things. Which hopefully it will. Second, the other side is marketing. And the big question here is: at what point does the multitude of brand names dilute the value of the brand name of the marketer? In this case IHG? Or any of the other hotel groups? And the share price of IHG? And, third, at what point do the individual hotels realise they are not gaining from being marketed by a company that holds brands? I think all three of the above will come into play in the next few years, and IHG will be about IHG’s core brands again. And Hilton will be about Hilton’s core brands again. We’re currently at somewhere close to a point of resistance and I suspect there will be a tipping point and then suddenly all of these affiliated brand names will start to disappear.

    • Dubious says:

      RE: “I am a big fan of Hilton’s Curio Collection and Marriott’s Autograph Collection. Some hotels in Hyatt’s Unbound Collection are also on my wish list.”

      I know this is only one data point and one person’s opinion, but does this suggest that ‘brand standards’ actually get in the way of delivering a good high-end product and service, the opposite of what they are meant to ensure? If so, it may be that the market moves towards fewer out-and-out chain brands, even if there are tax implications for the underlying companies.

      • Rob says:

        Brand standards mean you don’t get mediocrity but owners also don’t see the need to exceed (and IHG wants to avoid a HI being smarter than a CP etc).

        It’s like any other branded product. An M&S jumper won’t fall apart after one wear but won’t be the most luxurious on the market. People are happy with that.

        • Harry T says:

          Having stayed at the Shelbourne recently and the University Arms twice previously, I think the Autograph Collection benefits from being more loosely affiliated with Marriott – the hotels are free to choose their own toiletries, beds, decor and style. When this is done well, it allows a hotel to retain independence and deliver a more unique and refunded product. However, I suspect it also gives hotels a chance to use Marriott’s marketing and not be bound by any minimum standards.

          I suspect the same holds true for Hyatt’s Unbound Collection, but I’ve only stayed at GSY (phenomenal and a good example of a hotel being “it’s own man” within a larger umbrella).

          • Andrew says:

            Autograph allows hotels to have irritating and odd quirks though.

            I like The Alexandrian in Alexandria, VA. It’s an Autograph hotel. In line with hotel policy (at my last visit), there are no kettles or coffee makers in the bedrooms, fresh coffee is available to collect from a self-service area of urns in the foyer that are restocked regularly from 6am to 10pm.

            It’s decent enough coffee. But it’s just a bit weird having to throw on some clothes at 06:30 to get yourself a coffee from the Ground Floor. In the lift with other caffeine needy people in their boxers and flip flops or their disney onesies. Some trying to juggle three cups and press lift buttons.

    • ChrisC says:

      Sorry I don’t understand the tax point you’re making.

      As to the multitude of brands there are a lot of people who have no idea who IHG are but they do know (say) Holiday Inn and Kimpton but have no clue they are part of the IHG brands. Maybe that’s because they don’t collect IHG points but book based on price via an OTA.

      Same with Accor few of my friends didn’t realise that IBIS and Sofitel are part of the same group.

      • TGLoyalty says:

        Agree I have no idea why tax implications would change.

        IHG is a marketing group the individual properties will all keep their current ownership structure so I don’t see how paying IHG a franchise fee / booking fee changes their tax structure.

        • Super Secret Stuff says:

          It won’t affect them because of the catastrophic effect it would have on major franchises like McD, KFC, Subway etc, the US won’t allow it as they are not the primary target

        • Tim says:

          The individual properties maintain their tax structure. No difference for them. It is the taxes on the profits on franchise fees – currently located in low tax regimes both onshore and offshore that will increase if the global tax system shifts in the direction away from transfer pricing towards formulary apportionment (on one hand) and a minimum rate of taxation of 15% applied by low tax regimes (on the other) on non-domestic business activities – the latter only likely to increase in the future if the system changes. With, for example, IHG not able to benefit from a hypothetical 2% tax rate (if that) on profit on franchise fees, and instead, having to pay 15% (due to globally agreed minimum tax applied by low tax regimes on non-domestic business) or higher (due to potential shift away from transfer pricing to formulary apportionment) then the costs of franchising, or signing up to IHG’s programme, increase, all else being equal. There’s a load of ‘ifs’ there. But the wind is shifting on global tax, and if the agreed deals are implemented by the 138 countries signed up to it (another big if – but, for example, getting Cayman and Bermuda and other household name tax havens to agree to a minimum tax of 15% on some non-domestic business is a big shift in itself) then expect the wind to continue in that direction with potentially rates of around 20-25% applied to non-domestic business on intangibles – such as franchise fees. Everything could change in a few years though. Much depends on the administration of the U.S and the weight of the U.S. in the world.

          • Paul Pogba says:

            If I were Cayman or Bermuda (or even Ireland), why would I sign up to a tax deal that obliterates my key comparative advantage? It’s easy to get those with a tax rate above the threshold to agree, it signals virtue, costs nothing and the finance minister might get a jolly out of it but everyone else is going to tell you where to go.

          • Tim says:

            Paul: well you’re right about Ireland. But not the other 130 jurisdictions that have agreed to implement the deal. And Ireland is about to capitulate. The underlying reason is simple: without a deal, the current 100 year old international framework is shifting towards double jurisdictional taxation again on intangible assets and footloose capital. And that’s a worse outcome for all countries, and in particular, businesses that operate across national borders. Such as IHG.

          • Lady London says:

            I’ll believe it when I see it. To avoid fancy booking methods and even more convoluted offshore structures to escape whatever comes along, other than some sort of agreement which might involve the FAANGS and possibly Amazon, I think it’s pretty clear to most countries that international tax cooperation will still leave big gaps so their best recourse is consumption taxes (VAT, and transaction fees payable to government where these can be enforced

  • Graeme says:

    Only 10 months ago Pattaya Aquatique was in PR stating it would join Marriott Autograph collection.. will see what happens when it actually opens, only 90 mins drive for me to get there.

  • JDB says:

    It is very disappointing to see the big brands absorb previously good hotels into their universes as this fairly routinely leads to standardisation, corporatisation and more often than not a reduction in standards. Fortunately, smart hoteliers have spotted that this opens up the opportunity to open new, more interesting and better hotels. The private or smaller groups (eg Dorchester Collection, Firmdale, Red Carnation etc) are pulling away from the rest.

    • Rob says:

      They are not being absorbed, that’s the point. Nothing changes at the hotel except that it appears on ihg.com and joins Rewards. The manager is not imposed by IHG and there are no brand standards to meet.

      • ChrisC says:

        That’s basically the same with MR & Mrs isn’t it?

        They are part of IHG as far as marketting etc is concerned but they are also independent hotels selling as part of the Mr & Mrs marketting system,

      • TGLoyalty says:

        There will be some sort of “brand standard” they aren’t going to let any old crap join.

        What you mean is IHG won’t dictate exactly what they must stock, sell, look like etc

      • Hbommie says:

        …and does the hotel experience change when joining Rewards? A part of the ‘luxury’ experience is the clientele that stay in the properties. The price point in someways dictates who book, opening this up to points will change that dynamic.

      • JDB says:

        In principle you are right, but in my experience these hotels still gravitate towards LCD standards, presumably sharing ideas of how to cut corners/save costs they don’t think the customer will notice. It ought to be better for the Autograph/Vignette/Unbound etc. but doesn’t always work. Acquisitions of previously good brands like Regent are not so slowly being destroyed by IHG corporatisation.

        • TGLoyalty says:

          How could anyone objectively state that regent is being destroyed after about 3 years of ownership of which 2 have been during a period of sustained turbulence for the hospitality businesses worldwide.

          • JDB says:

            @TGLLoyalty I have seen this happen at one particular Regent that shall remain nameless. IHG quickly cut key staff and removed many of the good bits that made the hotel special. I have seen some internal memos that are frankly sad to see! It is somewhere I used to stay very regularly but haven’t been able to get to that recently, but recent reports from reliable people tell me it continues to go downhill.

            I don’t think IHG has the right skills or mindset to run real 5* hotels, when even their flagship brand isn’t up to much. I have avoided IC for a while and recent reports on here for example of IC Mexico City confirm that’s a good decision. The IC Cannes (now under a new owner and I think closed for refurb) was also particularly poor but still v expensive.

          • TGLoyalty says:

            Why nameless? Name the property so everyone knows not to bother.

      • JDB says:

        Rob, there may be varying degrees of ‘absorption’, but once hotels start doing points, promotions, free reward nights, paying brand fees, sometimes taking the ‘franchise’ owners’ products and processes, everything changes, and rarely for the better.

        • TGLoyalty says:

          They will already be paying heavy booking fees to OTAs and travel advisors. This is simply another channel, which “should” be better value to the hotel.

          • JDB says:

            @TGLoyalty – it seems they end up with both mouths to feed. I have a friend who is the COO for a company that operates hotels under lots of brand umbrellas and he is always bemoaning the huge commissions they have to pay away to TAs/OTAs on top of everything else. A surprising number of people don’t book via the direct channels.

          • Rob says:

            The Great Northern at KingsX did a trade interview when they joined Marriott. Basically, given the 22% fees to Expedia etc plus huge SEO / AdWords bills (£10k per month), Marriott was looking a lot cheaper.

          • TGLoyalty says:

            I’m sure there is a level of base fee that they have to pay to operate under the brand. However, it’s clear that the largest slice of the pie goes to the channel via which the stay is actually booked!

        • The Savage Squirrel says:

          “once hotels start doing points, promotions, free reward nights, paying brand fees, sometimes taking the ‘franchise’ owners’ products and processes, everything changes, and rarely for the better.”

          Well me being able to stay there and not give them any money at the end is better; a LOT better; for me at least 😀

          It’s true that for the same cash a better independent alternative to big chains is available in almost any market with a reasonable number of choices (although I admit worse ones will be too, and identifying the option which is the better one is an imperfect science).

  • Diydegsy says:

    Do ambassador members receive any benefits at Kimpton hotels?

    • Simon D says:

      I don’t believe so, but (apparently) you can use your ambassador weekend nights in them, including in week days

      • Rob says:

        Selected hotels …. Kimpton Paris is just weekends

        • Harry T says:

          @Rob would you be interested in a review of the new Kimpton St Honore? We are due to stay there this weekend.

          • YC says:

            See u there @HarryT! Are you up for a drink?

          • Rob says:

            I am planning a visit once the IC lounge opens, covering both at once. Seems impressive.

          • Lyn says:

            Rob, is there any information about when the IC lounge will actually open?

            Club bookings show as available from September 1st, but I think it is probably French Covid regulations that are keeping it closed for now. The club lounge at the Hyatt Etoile is also closed at the moment.

          • Rob says:

            No, waiting for news.

  • Tomas Hollingsworth says:

    Its my favourite type of dressing too.

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