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Rendering of the future Ruby Hotel in Chicago planned to open in 2027. IHG acquired the German brand in February 2025.
beyond reliance on the delta between RevPAR and total expense growth. He called profitability a team effort built on partnership.“ I’ m actually more confident and optimistic than I ever have been that we are down that path,” Shah said.
IHG’ s Maalouf tapped into owner frustration by offering both empathy and solutions.“ There’ s no question that the last five years have been kinder to brand companies than to ownership companies— the share prices tell the story,” he said.“ We can’ t be successful without hotel investors. If somebody isn’ t willing to be asset heavy, then the asset-light game stops.”
As succor, he ticked off various ways through scale and technology to assist owners in revenue management, marketing, on-prem support and more.“ AI allows us to keep that quality of service high, but lower the unit cost,” he said. In May 2024, for instance, IHG lowered its standard loyalty assessment fee that owners pay into the fund.
Global brand companies, he said, are adopting technology to help cover escalating costs.“ That’ s what great businesses do. They don’ t adopt technology just to produce more things, but to lower costs,” Maalouf said.
The highest cost to owners is labor. Shah said that his hotels have now relied less on contract labor in favor of“ own in-house labor,” which, he said, has helped shift the conversation from margin compression to margin expansion, along with the ability to drive higher rates as consequence of rising inflation.( Hotels can reprice rooms daily.) Brand standards, he said, are also under scrutiny as they pertain to the operating model.“ Is that food-and-beverage brand standard the right standard?” he asked, offering that technology, now, has the ability remove costs from the system and enhance efficiency.
F & B programming and how to use space efficiently has long been a thorn in the hospitality industry’ s side— more so now as traveler expectations and experiences have immutably changed. For instance, there are a multitude of hotels, as Capuano said, that are now obsolete, anachronistic product. The white elephants of the hotel industry, if you will.“ We built these amazingly efficient boxes in the midscale and select-service tier, but at that upscale and upper-upscale tier, that’ s the riddle,” said Capuano.“ You’ ve got thousands of hotels that were designed for a different era.” He added that traditional roles, from bellman to doorman, are likely due for a reset.
If hotels need a rethink, don’ t expect room sizes to get bigger. Marriott and IHG each made big acquisitions in 2025; the former of citizenM and IHG with Ruby Hotels, both European-born brands. CitizenM is known as a tech-forward brand that cracked the code on self-check in, while Ruby Hotels has been described as“ lean luxury.” Both favor activated public spaces and smaller room footprints.“ We call it urban micro,” said Maalouf.“ Where you can shrink the room size, but with artful design, people feel really good about that room.”
In economic terms, smaller rooms give developers the ability to add more room density, which increases ROI and, as Maalouf pointed out,“ your square foot return is much better.”
According to Maalouf, all you need is 140-square-foot rooms and a buzzy public space.“ That actually makes money,” he said.
12 hotelsmag. com Mar / Apr 2026