As the president and CEO of IHG Hotels & Resorts, Elie Maalouf has his hands on the levers of an industry being reshaped by technology, loyalty economics, and the gravitational pull of big brands.

“There’s always been a mix of local and global in hospitality, but the game has changed,” Maalouf said. “Today, the regional players that want to go further need access to capital, technology, and distribution networks that only global brands can provide.”

One clear example is IHG's April 2024 deal with Novum Hospitality. A homegrown German group decided it made more sense to hitch its future to IHG than to go it alone with its own brands.

That decision—turning over 119 properties for franchising to the IHG machine—tells a bigger story about what’s happening across Europe’s fiercely independent hospitality scene.

A year and a half into the role, Maalouf sat down with Skift for an exclusive interview at the Americas Lodging Investment Summit (ALIS) in Los Angeles. The CEO covered the dynamics he sees driving more independents to IHG, how tech investments could give IHG a competitive edge, and why he's excited about Japan's potential for hotel development (from midscale to luxury).

Europe is a key market for a global hotel group like IHG. Only about 40% of hotel inventory there is branded, according to CoStar's STR.

“We see tremendous opportunity for growth in Europe, where independent hotels and regional chains are realizing that competing in today’s digital landscape is incredibly expensive,” Maalouf said.

Rather than trying to buy IHG's way in with hard assets, the group is relying on a franchise-heavy model that emphasizes conversions, such as the Novum deal.

Novum's decision wasn't just about gaining access to IHG's global distribution network. It was also about tapping into a technological ecosystem that would have been prohibitively expensive to build independently.

In other words, Europe's hotel landscape requires massive investment in digital infrastructure. "It's the kind of investment that's becoming increasingly difficult for regional hotel groups to shoulder alone," Maalouf said.

"How you interact with the travel experience from beginning to end is now very digital," Maalouf explained. "You expect to research and book digitally. You expect to be able to check in and out digitally, to ask for services in the hotel digitally, and so on." 

Software investment is one of the ways IHG has sought to be an attractive partner for independent hotel owners who are feeling the squeeze of rising tech costs and changing consumer expectations.

Its multi-year shift to a cloud-based Amadeus-run central reservation system was well-documented pre-pandemic. Since then, the hotel group has continued revamping its tech stack.

Worldwide, IHG has rolled out what Maalouf calls the "industry's leading guest reservation system." The software lets all its hotels sell rooms as well as specific "attributes" — floors, views, experiences — before a guest even walks through the lobby.

Maalouf said it has been rolling out AI-driven systems that flag potential guest issues and provide real-time assessment of guest feedback before they become Tripadvisor fodder.

“If you wait for a survey after checkout, you’ve already lost your chance to turn a stay around,” he said. “The key is fixing problems while the guest is still in-house.”

A new AI-powered revenue management system, already deployed in nearly 3,500 properties, helps optimize pricing in real-time. The company has even re-platformed its content management system to enable multi-language translation and rich-media content delivery.

IHG has also been nudging franchisees toward renovations by offering data on what updates will have the biggest impact on guest satisfaction and revenue.

Maintaining consistent quality across properties is crucial for a company hosting approximately one million guests per night.

"Even if we're 99.9% precise in delivering customer service, that's still a thousand people that weren't exactly satisfied," Maalouf notes.