Jim Abrahamson had big shoes to fill when he took over as president of IHG’s Americas region in January. He replaced the highly respected and well-liked Steve Porter, who died last summer. While Porter was a hotel operator at heart, Abrahamson came to the job mostly from the world of hotel development and brand building, two disciplines that will serve him well as IHG plots its growth strategies.

Before joining IHG, Abrahamson headed Americas development for Global Hyatt and oversaw the well-received rollouts of the Hyatt Place and Hyatt Summerfield Suites brands. Before Hyatt, he was an executive with Marcus Hotels and Hilton before that.

At last week’s New York University International Hospitality Industry Investment Conference, Abrahamson and Kirk Kinsell, his EMEA region counterpart, accepted the Lodging Hospitality Stephen W. Brener Silver Plate Award given posthumously to Steve Porter. It was a fitting passing of the torch. Following the conference, we had a chance to chat at length with Abrahamson on his plans for the company as it fights its way out of the hotel industry downturn.

What is your outlook for the summer season?

These are tough times, and although rate is still distressed we’re seeing a leveling off in occupancy declines. We’re also seeing improvements across the board in revenue penetration scores. In the first half of the year, business travel and group and meeting business were under fire, but summer is all about leisure. We’ve seen this in other recessions: It has to be leisure led and since we’re heading into summer it’s right on point. We will be very astute in the values we offer and how we present our brands electronically through our advertising and promotions. The same thing happened in the last recession. We needed permission to travel after 9/11 and we’re in that same mode now. The message coming out of Washington now is that it’s OK to travel again.

Do you see any signs that financing for hotel projects is becoming more available?

It depends on scale and location. Because of our size and the size of our pipeline, and since we have so many long-term owners in our business, lending is still happening and we’re opening hotels at record pace—40 hotels in May, an all-time record for us. Those hotels that were funded and financed are moving forward. No one is holding back, or stalling or delaying. We see continued growth in new openings over the course of this year and into 2010. The $10- to $15-million deals are still getting financed through local and regional banking relationships. On the other hand, it’s tough to get anything done over the $15-million to $20-million mark.

Many of our franchisees are well-funded. They’re strong and believe in their markets so they’re willing to take more equity and financing risks. That’s really what lenders are looking for now: more guarantees and more equity. Because of the confidence our franchisees have in our business model and our reputation, they’re willing to take on that additional risk in order to get their deals done.

What geographic areas and brands are most active in your Americas pipeline?

Clearly, our mainstream brands, Holiday Inn and Holiday Inn Express, make up the majority of our pipeline today. What serves us well is this combination of new openings and the backlog we have on hotels waiting to go under construction. As they come on line, the newness of those hotels, coupled with the relaunch of Holiday Inn and Holiday Inn Express, will change the dynamics of our landscape.

Of the 1,700 hotels in our global pipeline, about 1,000 of them are Holiday Inn and Holiday Inn Express. The next largest group is our extended stay group, Candlewood Suites and Staybridge Suites. Our global pipeline is roughly 100 percent of our system size so we’re poised to double the size of the system in the next few years.

How is the relaunch of Holiday Inn and Holiday Inn Express progressing?

More than 800 properties globally and 700 in the Americas have completed the relaunch. While we’re just a quarter to a third of the way through the system, 700 relaunched hotels is larger than most chains. Most hotels can finance it out of cash flow, so we’re seeing quick payback in terms of market share growth and dollar improvement.

What is the status other product upgrade projects?

In the Holiday Inn system we have nearly 300 hotels under a major renovation and they are continuing to progress. We work with franchisees that have major PIPs to provide them with extra time to get them accomplished if needed. We don’t manage a system; we manage individual owners and operators so every situation is unique.

The other area we’re focusing on is Crowne Plaza. Out of the 193 hotels in the system, about 30 of them just completed a major PIP and another 60 will be done by the end of the year. In the pipeline we have about 100 globally, including 40 in the Americas. We have new hotels coming into the system and we just finished refurbishing about a quarter of the system, so reinventing Crowne Plaza is a big part of our strategy.

How is your extended stay business performing?

Extended stay typically outflanks the mainstream brands from an occupancy point of view. What’s good about the product is that you can run a fairly high margin because employee requirements are lower than the other brands. We’re seeing our upscale competitors like Residence Inn and Homewood cutting their rates to a larger extent than we would expect. We’re able to hold our market positions because we’re mainly lower and upper midpriced with Candlewood and Staybridge. Our positioning is good, and we don’t get into that discounting game.

In previous recessions, extended stay gave us the first signs of hope as companies start to transfer people around and begin work on new projects. We’re not seeing it yet, but we’re watching very closely because in the past I’ve seen the segment as a leading indicator.

What about the extended stay pipeline?

It’s nearly 100 percent of our system size. We have construction starts although at a slower rate than it has been in the past couple of years.

What kind of initiatives has IHG in the Americas launched to help your owners get through these tough times?

We’ve stayed on strategy and haven’t retreated or retrenched and, in fact, we’re really focused on driving revenue. We just launched our largest free rooms program through Priority Club, in which guests stay two nights and get one free. The enrollment in the club has been extremely strong and the take on the offer has been very good. We also launched a friends and family program, taking a page from the book of some other companies. We engaged nearly 350,000 employees throughout the Americas in the program.

We’re in a time of hand-to-hand combat and guerilla marketing and while we’ve seen the competition pull back on their field sales force, we increased the size of our global sales organization by 30 percent. We’ve also done a tremendous amount of work in e-commerce through paid search. Customers are both buying and shopping so we’re one of the largest keyword buyers in the hotel space.

What are the biggest challenges facing IHG in the Americas?

The challenge is that we need people to start traveling again. We want to motivate people to travel and as an industry we can take on that challenge. Travel is an American entitlement, and we need to continue to push that idea. As a senator, President Obama was a sponsor of the Travel Promotion Act so I think he’ll continue to support us on travel and tourism. I loved to see him go to Europe because I want Europeans to come back here. Everyone wants to travel to the U.S., so let’s make it easier for them to come here. The message we’re sending to Washington is open the borders, ease the visa requirements and get international travel back to the U.S.

The banking cycle will put the brakes on supply growth slightly but it won’t derail it entirely. The positive out of the downturn is that it flushed out speculators and people from outside the industry and prevented non-qualified projects from getting started. I never liked hotels not funded by the basic underlying tenets of business. The financing cycle will right itself. It will take time, it will take money, and it will take focus.