PHOENIX — IHG Hotels & Resorts' newest hotel brand, Ruby Hotels, is in the early stages of its expansion into the U.S., but an IHG executive says Ruby will fill a whitespace in the company's portfolio in top 25 markets.
IHG acquired the Ruby Hotels brand for €110.5 million ($115.8 million) from Munich-based hotel firm Ruby GmbH back in February. According to IHG's website, the brand has 16 open hotels and 2,673 open rooms — all in Europe — with 19 more hotels in its development pipeline.
In September, IHG announced its intentions to develop Ruby Hotels in the United States.
Lauren Krostue, vice president of global brand management of Even Hotels and Ruby Hotels at IHG Hotels & Resorts, said Ruby fills a whitespace in IHG's portfolio as its only urban micro hotel brand. Bringing the brand to the U.S. will provide IHG a chance to gain demand in city-center locations where guests are seeking the experiences these hotels can provide.
"There's been a lot of demand, but [the U.S. is] also one of our biggest markets," she said. "The U.S. was the next logical step for us, coming from Europe. We're early days, but it's been exciting so far."
IHG is targeting the top 25 U.S. hotel markets for its expansion of the Ruby brand into the States, Krostue said. Just as important as selecting the right markets is choosing the correct location within that market; IHG's target guest for its U.S. Ruby properties "really wants to be in the middle of the action," she said.
In regards to developing these hotels, Krostue said IHG is having conversations about project types including new build, conversion and adaptive reuse. Each property will be unique and will fall somewhere in the range of about 150 to 225 rooms, so there's more flexibility when it comes to converting an existing hotel.
For prospective owners of Ruby properties, it has to make economic sense. The brand's lean, select-service operating model paired with its bespoke touch from hotel to hotel is what will make it stand out, Krostue said.
There will be a host at each Ruby property who serves as a front-desk attendant and a bartender in one. Each hotel will have its own name and narrative based on the history of the location to bring a sense of place to guests.
"That's the sort of magic wrapping all around the owner economics and that is what makes Ruby so special in the segment," she said.
Much has been made in the hotel industry about the concept of brand proliferation. Ruby Hotels is IHG's 20th hotel brand, which is less than most of the other major brands. Krostue said IHG focuses on staying disciplined around making sure an added brand fills a need for both owners and guests.
"I know folks have talked about — for the brand companies, the swim lanes are getting maybe narrower than we were when each of us had nine to 10 brands," she said. "But this one specifically, for Ruby, it's such a clear need and a concept that's really been winning in Europe for us."
While the current focus of the brand is on expanding in Europe and getting its feet off the ground in the U.S., Krostue said there's "been a lot of interest globally" in the Ruby Hotels brand, and IHG is beginning to start conversations and planning in regions such as Asia.
"We'll definitely be setting our sights there before too long, timing and specific markets to be determined," she said.