IHG to expand with new and acquired luxury brands

Intercontinental Hotels Group (IHG) revealed it is to launch a new “upscale conversion brand” as well as acquire small luxury brands later this year.

The global company, which counts Crown Plaza, Holiday and Hotel Indigo among its current brands, also announced the highest annual organic growth across the business since 2009 alongside a 2.7% increase in revenue per available room (revpar), in its preliminary financial results for 2017.

Across the UK revpar increased 4.5%: up 4.6% in the regions and 4.3% in London.

Total group revenue for the global company was up 5% to $25,702m (£18,427m) while revenue grew by 4% to $1,784m (£1,279m).

Operating profit increased by 7% to $759m (£544m) and adjusted earnings per share grew by 20% to 244.6¢ (175.4p).

The total size of the company by the end of last year reached 798,000 bedrooms as the result of an additional 48,000 rooms and the removal of 7,000 rooms.

Keith Bar, IHG’s chief executive, said that IHG intended to build on the successful announcement of the Avid mid-market brand last September since when it has signed 75 hotels by launching “a new upscale conversion brand in 2018, leveraging the power of our system to capture share of this significant premium priced market.

“We will also build out our development resource and capability in the sizeable global luxury segment, where we are looking to acquire small luxury brand(s) to incubate and grow.”

Barr added that in recent years the company has built “a powerful and effective enterprise” as it has moved towards a fully asset light model, which has helped drive “strong performance across our 5,300 hotels”.

He said that new initiatives from IHG intended to accelerate the company’s growth rate included “redeploying and refocusing resources to leverage our scale; strengthening our loyalty programme; continuing to prioritise digital and technological innovation; enhancing our industry leading franchise proposition; strengthening our existing brands; and adding new brands where we see the greatest potential for growth.”

IHG currently has 13 brands.

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