IHG Transforms 14 Hotels in Kyoto with a Single Agreement

The growth of hotel chains does not always mean building new properties.

IHG Hotels & Resorts has signed one of the strong examples of this in Japan. The company has signed a portfolio agreement covering 14 hotels and a total of 1,063 rooms with its long-time partner GCP Hospitality in Kyoto.

Most of the agreement is not new construction, but rather conversion.

The portfolio includes 12 Garner hotels, one Holiday Inn Express, and one unbranded hotel. According to IHG, all properties will undergo renovation and rebranding and will gradually join the system within the next 12 months.

This structure shows why the conversion model has become increasingly important in the growth strategies of international hotel companies.

12 of the 14 hotels will be Garner

The Garner brand is at the center of the agreement.

IHG developed Garner in 2023 specifically for the midscale conversion segment. The brand entered Japan in 2025 with three hotels in Osaka. According to the company's announcement on August 24, 2026, Garner has reached 100 open hotels globally.

The fact that 12 of the 14 hotels in the Kyoto agreement will be converted to Garner is no coincidence.

The main advantage of conversion brands is that they allow repositioning according to specific brand standards instead of completely demolishing and rebuilding an existing hotel.

This can mean for the investor in some cases:

• lower capital requirements,

• shorter opening timelines,

• preservation of the existing building,

• faster access to brand and distribution networks

However, conversion is not without costs.

Significant investment may be required to bring room standards, fire safety, technology infrastructure, signage, breakfast operations, and common areas up to brand standards.

IHG is focusing on the business hotel segment in Japan

IHG's announcement particularly highlights the business hotel segment in Japan.

The company notes that this segment has long been dominated by local operators and that the penetration of international brands has remained relatively low.

This creates a natural growth area for Garner.

The classic business hotel model in Japan is based on:

compact rooms,
functional design,
proximity to transportation points,
high operational discipline
and limited service.

Garner is similarly positioned in the "essentials" segment.

Therefore, the brand aims to combine an already existing accommodation behavior with international distribution, loyalty, and brand systems instead of creating a new consumer habit from scratch.

Why is it important specifically for Kyoto?

According to IHG, the hotels in the agreement are located in key transportation and tourism areas such as Kyoto Station, Shijo, and Gojo.

This location structure can target two customer groups simultaneously:

business travelers on short stays and
leisure guests exploring the city.

Since Kyoto is a destination with strong international demand, connecting to the global distribution system can provide additional visibility for existing independent hotels.

IHG also notes that after the agreement, its presence in Kyoto spans different segments such as Six Senses Kyoto, ANA Crowne Plaza Kyoto, Holiday Inn Kyoto Gojo, and the existing Garner Hotel Kyoto Shijo Karasuma.

This portfolio distribution is significant.

The company is now establishing a denser network in the city not only in the luxury or premium segment but also in the midscale and essentials categories.

Why is the conversion model attracting investors' interest?

Developing a new hotel takes time.

Land, planning, permits, financing, and construction processes can span years.

In the conversion model, however, there is an existing room stock.

The investor can:

renovate the existing asset,
change the brand,
connect to the global reservation system
and join the loyalty program.

IHG also highlights the access of hotel owners to the company's marketing, technology, distribution infrastructure, and IHG One Rewards system as part of its value proposition in growth in Japan.

This illustrates the fundamental economic rationale behind conversion agreements.

The hotel owner is not just getting a new sign; they are connecting to a larger commercial system.

Why is the loyalty program important in the conversion decision?

IHG has more than 160 million IHG One Rewards members globally. The company reports having a network of over 7,000 hotels and more than a million rooms operating/franchising.

For an independent hotel, joining such a loyalty ecosystem can be particularly important for acquiring international guests.

A customer may not know an independent hotel in Kyoto at all.

However, when the same property transitions to a global brand:

it becomes visible in the app,
points can be redeemed,
it can enter corporate travel programs,
and it can participate in central campaigns.

This also shows that conversion is not just an operational decision but a distribution one.

Holiday Inn Express is also growing in Japan

The portfolio includes one Holiday Inn Express hotel.

IHG notes that this agreement marks the third Holiday Inn Express signature in Japan. The other two hotels are located in Osaka City Centre – Midosuji and Sapporo Susukino.

The difference between Holiday Inn Express and Garner is that the brand standard is more established and recognized globally.

Therefore, having two different essentials brands in the same portfolio is noteworthy.

Not every building may be suitable for the same brand.

Room size, lobby area, breakfast capacity, and existing investment needs may require different brand selections.

In this regard, portfolio conversion does not mean "making 14 hotels uniform" but rather placing each asset into the appropriate brand box.

GCP Hospitality will manage operations

GCP Hospitality is involved not only on the investor side in the agreement.

The company has been appointed to lead the management team of the 14 hotels. IHG will provide support on the brand, distribution, and global system side.

This structure is one of the typical examples of the asset-light hotel model.

A global brand does not have to own real estate directly.

Instead, it provides:

brand standards,
reservation infrastructure,
loyalty,
technology
and marketing systems.

The local or regional operator manages the daily hotel operations.

The success of this division of labor depends on the correct alignment of incentives for both parties.

The hardest part of the conversion is not the sign, but the operation

A hotel brand change may seem to guests like a new name and decor.

From an operational perspective, it is much broader.

The entry of 14 hotels into the same system in a short period creates:

PMS transitions,
reservation channels,
revenue management,
housekeeping standards,
brand training,
breakfast operations,
procurement,
uniforms and signage

and many other work items.

Especially the conversion of 12 hotels under the same brand can provide scale advantages in terms of bulk purchasing and training.

However, it also complicates managing the conversion timeline.

If a technology problem occurs during the transition of one hotel, the costs increase when repeated across 12 hotels.

Breakfast operations are a critical F&B issue in conversion

In essentials segment brands like Garner and Holiday Inn Express, F&B operations may not be as extensive as in full-service hotels.

However, breakfast is an important part of the brand experience.

IHG defines Garner as an affordable brand focusing on hot breakfast and basic needs; Holiday Inn Express operates with a breakfast-included model.

Therefore, while the kitchen and breakfast area may seem small during the conversion, they are critical from an operational perspective.

In the 14-hotel portfolio:

equipment standards,
supplier selection,
buffet flow,
food safety,
staff planning
and waste

can be redesigned simultaneously.

This shows why conversion projects do not only mean furniture and room renovations for HORECA suppliers.

Why is it important for Turkey?

There are also a significant number of independent city hotels and local chains in Turkey.

As new hotel supply increases, the only way for global brands to grow is not just through new development.

An existing hotel can:

transition to a conversion brand,
join a franchise system
or connect to a global distribution network

which can be a faster growth alternative.

Especially in the business travel markets in Istanbul, Ankara, Izmir, and Anatolia, there may be potential for midscale conversion brands.

However, from the investor's perspective, evaluating the brand agreement solely based on the royalty rate is not sufficient.

In the total calculation:

renovation costs,
PIP requirements,
technology fees,
reservation contributions,
loyalty shares,
ADR effects
and franchise fees

should be evaluated together.

Stafflink’s Opinion

In our view, the most important aspect of IHG's Kyoto agreement is not the addition of 1,063 new rooms; it is the scaling of the conversion model that transports existing hotels to the global system more quickly.

Building new properties requires capital and time. Conversion can connect existing assets to the brand, technology, and distribution network in a shorter time.

However, this should not be assumed to automatically be a better investment.

If the conversion is successful, the hotel gains stronger distribution and loyalty access. If it fails, the investor bears the renovation and franchise costs but may not achieve the expected ADR or occupancy increase.

Therefore, the real question in conversion agreements is not "which brand are we transitioning to?" but rather:

"Does the additional revenue this brand brings to the system truly cover the total cost of conversion?"