Hotel Indigo’s Big Bet

Sometimes, a hotel company needs a bold move to catapult its brands into the next level of consciousness among guests and the development community. That's what IHG hopes it did with the development of the Hotel Indigo San Diego Gaslamp District, a first-of-its-kind property in several ways. The 212-room hotel, which opened in July, is IHG's and Hotel Indigo's first LEED-certified property (and the first hotel in San Diego with the designation). IHG developed, owns and manages the 12-story property, which sits at the edge of San Diego's Gaslamp District and in the shadows of Petco Field, the San Diego Padres' ballpark.

"This hotel shows IHG's commitment to the brand and allows us to show developers what Hotel Indigo is capable of in terms of design, fit and finish and, of course, operating performance," says Janis Cannon, IHG's vice president, global brand management, for Hotel Indigo. "And this hotel gives us a global launching pad for development in Asia and the Pacific."

For Jim Anhut, IHG's chief development officer in the Americas and one of the brand's key architects, it was important for IHG to develop and manage the hotel.

"Time was of the essence because we wanted to place a stake in the ground on the West Coast to demonstrate to our ownership and franchisee base the direction the brand is heading, and that's toward more of an upscale and upper upscale positioning in densely developed urban markets."

BRAND PRINCIPLES
The property clearly reflects the three linchpins of the brand's identity: Interpret Indigo, Seasonal Renewal and The Golden Mean. These New Age-sounding philosophies are actually solid business principles that have guided the brand's development since its launch in Atlanta in 2004.

Chief among them is Interpret Indigo, a design platform that helps define the chain's somewhat oxymoronic segment: branded boutique. Interpret Indigo encourages developers to creatively embed local culture and community into the design of each Indigo property. But to retain the essence of the brand, certain design elements-pure colors, natural imagery, hardwood floors, area rugs, spa-like showers and signature furniture pieces-remain constant throughout the chain.

"We deliberately didn't position the brand as design-led or exclusive so we would never find ourselves at the trailing end of a trend," says Anhut. "In our business, the useful life of buildings and brands extend into the decades, so you can't hang your hat onto something that's of the moment or very trendy."

Design of the San Diego property clearly reflects the Southern California coastal culture as well as the hotel's urban setting. It's also in line with the brand's adherence to a design constant based on a mathematical ratio called The Golden Mean or Fibonacci Sequence. The spiral proportions of the brand's nautilus shell logo are an example of the concept.

Local photography and other artwork are evident through the hotel. Both guestrooms and public spaces have large photomurals of native plants and the nearby Pacific Ocean. The property's most striking architectural element is a 40-foot glass sculpture named Indigo Waters that's positioned on the western façade of the building extending from the ninth to 12th floors. Local artist Lisa Schirmer executed the piece to mimic the waves and ripples of the ocean.

The hotel's food and beverage outlets also incorporate the California lifestyle. Most spectacular is the Phi Terrace Bar, a nine-floor rooftop space that features firepits, a reflection pool, lounge seating and most dramatically, views over the city and into the nearby baseball stadium.

Like other Indigos, the San Diego property will undergo cosmetic changes as the seasons change. Much as a retailer changes its windows seasonally, the overhaul will center on public spaces, with new scents, music, art and signage.

GOING GREEN
The San Diego property is green from the first floor to the roof. In fact, roofs on both the ninth and 12th floors are covered with drought-tolerant plants that reduce energy consumption and help alleviate the urban heat island effect common in city buildings. Another unusual sustainable feature is the flooring on the Phi Terrace Bar and nearby meditation deck. IHG says it's the world's first installation of a composite decking that's recycled polyethylene plastic and recycled wood fibers made from things like grocery bags, milk jugs and byproducts from the manufacture of furniture and cabinetry.

Other sustainability features of the hotel include operable floor-to-ceiling windows in some public spaces, kitchen composting, a ninth-floor herb garden and reserved and discounted parking for guests who arrive in fuel-efficient autos.

"Although there has been some hesitation in the past among developers to build green, we've shown with this property that making it happen doesn't have to be high cost," says Anhut. "We've created a kind of demonstration kitchen with this hotel to show developers what can be done. Developing with an eye toward sustainability is something that can now more easily be accomplished, both emotionally and economically, by developers."

Another new Hotel Indigo is taking green one step further. A 130-room property near the University of Georgia in Athens that opened this month is pursuing a LEED Gold certification. If successful, the property will be only one of three with the Gold designation from the U.S. Green Building Council. Among the green features developers Rialto Properties and Melaver, Inc. built into the project include a green roof, green pavement systems, an on-site public transit stop, bike racks and priority parking for hybrid cars.

A BRAND EVOLVES
As the brand grows in number of units, so too has it evolved from its debut five years ago in Atlanta. Happily for IHG executives, consumer acceptance of the product has enabled it to grow rates to a point where the brand now sits in the upscale or upper upscale segments of the business. As example of that pricing power, the San Diego Hotel Indigo was able to command a $245 rate during a citywide convention shortly after the property opened.

"There has been some upgrade in levels of finish in properties, but beyond that everything else has stayed pretty much the same," says Anhut. "We spent a lot of time upfront researching and developing the brand's direction before developers started building. Once it's launched, you can't divert very far from that course without frustrating your franchisee base."

Service is an area where IHG executives believe Hotel Indigo can continue to improve. The brand's positioning statement includes an Invite Inspiration module aimed at convincing staff to actively engage with guests to provide service and to anticipate their needs.

Anhut talks about an incident at one of the properties in which a married couple arrived to celebrate their anniversary. In talking with them, the front desk clerk learned the name of a song they danced to at their wedding, so while the couple was at dinner, the associate found the song, downloaded it to a CD and had it playing in their room when they returned.

"This is the kind of thinking we've embedded in the brand from the beginning and will be our most important hallmark as we go forward," says Anhut. "It's the kind of stuff that can't be learned from a database, but it's real, relevant and effective."

IN THE PIPELINE
With the opening this month of properties in Athens, GA and Durham, NC, the Hotel Indigo brand has 31 open properties. Six properties opened in the first half of the year, and by the end of the year, additional hotels will open in Asheville, NC, Baltimore, Nashville, Miami Beach and two in San Antonio. More than 60 properties are under development.

According to Anhut, the future of the brand will be in dense urban locations or near-urban spots with a mix of cultural, business and leisure activities. Resorts are another possibility, but Hotel Indigos won't be sprouting at interstate locations.

Indigo was a global brand the day it launched, not because its first hotels were overseas (In fact, the first two foreign properties opened in London and Costa Rica this year), but because of the brand's design and operating philosophies. Interpret Indigo, for example, guarantees each property, whether in Athens, GA or Athens, Greece, reflects that location's culture, geography, competition and market mix.

"Continental Europe is a prime growth target for us and we have two more hotels under development in London," says Cannon. "A property in Shanghai opens next spring. Domestically, we're looking at markets like San Francisco and Los Angles on the West Coast and New York in the East."

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