TIDMIHG
RNS Number : 9829G
InterContinental Hotels Group PLC
21 November 2022
21 November 2022
IHG and Iberostar sign a strategic alliance for resort and
all-inclusive hotels
in the Caribbean, Americas, Southern Europe and North Africa
InterContinental Hotels Group PLC (IHG or the Company) and
Iberostar Hotels & Resorts (Iberostar) announce today a
long--term commercial agreement for resort and all-inclusive
hotels. Iberostar is a family-run business based in Palma de
Mallorca, Spain, with more than 65 years' experience in the
hospitality industry, an excellent reputation for operating resorts
in outstanding locations, and a strong commitment to quality and
sustainability. Through this strategic alliance, Iberostar will
retain 100% ownership, preserving its autonomy and values. U p to
70 hotels (24.3k rooms) will be added to IHG's system under the
Iberostar Beachfront Resorts brand, which will become the 18(th)
brand for IHG. This will boost IHG's global system size by up to
3%. The first properties set to join the IHG system this December
will give IHG guests increased choice in sought-after locations
including Mexico, the Dominican Republic, Jamaica, Brazil and the
Canary Islands (Spain). Further properties in Spain and other
popular resort destinations in Southern Europe and North Africa are
anticipated to join IHG's system over the course of 2023 and
2024.
IHG guests will be able to look forward to memorable stays in
award-winning hotels*, ranging from family friendly premium
offerings to adult only luxury, in leading resort destinations,
including: Iberostar Grand Paraiso (Riviera Maya, Mexico);
Iberostar Selection Hacienda Dominicus (Bayahibe, Dominican
Republic); Iberostar Grand Rose Hall (Montego Bay, Jamaica); and
Iberostar Selection Anthelia (Tenerife, Spain). These add to IHG's
existing 260 resort properties that span brands including Six
Senses, Regent, InterContinental, Kimpton, Hotel Indigo, Crowne
Plaza, Holiday Inn and Holiday Inn Club Vacations. IHG has fewer
than 20 resort properties in the countries where the Iberostar
Beachfront Resorts properties are located. The agreement therefore
significantly increases and broadens IHG's resort footprint.
The portfolio of Iberostar properties will gain access to IHG's
enterprise platform, including its distribution channels and the
IHG One Rewards loyalty programme with more than 100 million
members. IHG in turn will increase awareness of its current brands
with a new set of travellers, and meet a clear desire from guests
and loyalty members for more resort destinations and the option of
all-inclusive stays.
In what is a large and high growth market segment, demand for
resort and all-inclusive stays has been buoyed by increasing
traveller desire for high quality experiences and stress-free
holidays, particularly post-Covid, and the ability to access such
stays as part of loyalty programme membership. The breadth of
resort choices for travellers has also increased in recent years,
with luxury and upper upscale destinations creating more wellbeing
and sustainability-led experiences that tailor to changing guest
expectations.
Iberostar and IHG share many company values, including a passion
for sustainability and responsible tourism, with Iberostar's
pioneering Wave of Change movement outlining clear aims to move
towards a circular economy, promote the responsible consumption of
seafood and improve coastal health. As part of the agreement, IHG w
ill work with Iberostar to create opportunities for joint
sustainability initiatives that align with IHG's 2030 Journey to
Tomorrow responsible business plan.
The Iberostar Beachfront Resorts brand will be included in a new
Exclusive Partners category in IHG's brand portfolio, which will
sit alongside its Suites, Essentials, Premium and Luxury &
Lifestyle categories.
Keith Barr, Chief Executive Officer, IHG Hotels & Resorts,
said: " As we continue to expand the footprint of our world--famous
brands, we are always looking at exciting, sustainable growth
opportunities in areas that can further enhance our offer for
guests and owners. Guests have told us of their wish for increased
choice of resort and all-inclusive destinations within our brand
portfolio. We are delighted to address that by working with such a
well-respected, experienced and like-minded partner as Iberostar,
and to see more amazing hotels join our system that continues IHG's
growth in so many of the world's most attractive markets and
destinations. Iberostar has successfully developed a leading
presence in beachfront and all-inclusive properties in the
Caribbean, Americas, Southern Europe and North Africa over many
decades, and we are excited about the opportunities to further grow
the brand's footprint together. This agreement increases IHG's
system by up to 3%, which helps to deliver on our ambitions for
system growth. We continue to explore further opportunities for
growth with exclusive partners, demonstrating the strengths and
attractiveness of IHG's enterprise platform."
Sabina Fluxá, Vice-Chairman and Chief Executive Officer,
Iberostar Group, commented: "With this agreement, we set the path
to continue the outstanding growth that began 40 years ago with the
creation of the Iberostar brand and which has positioned us among
the top resort brands in the world. The alliance with IHG combines
our strengths, represents a decisive step forward in the
distribution of Iberostar's beachfront resorts, and reinforces our
position as a benchmark in responsible tourism. By working together
we will grow our portfolio and we are really looking forward to
hosting IHG loyalty members in our collection of premium and luxury
beachfront resorts and all-inclusive properties."
Miguel Fluxá, Chairman, Iberostar Group, added: "This strategic
alliance will enable Iberostar Beachfront Resorts to benefit from
IHG's industry-leading technology, deep skills and global scale.
Retaining 100% ownership of Iberostar allows us to continue to
generate differentiation in the hospitality industry with a
long-term vision for our employees, clients, tour operators,
distribution partners and local communities that have been loyal to
us during all these years. We will continue to stay true to who we
are, preserving our philosophies and values of quality and
sustainability."
Further details on the agreement and financial overview:
-- The agreement gives IHG a licence to the Iberostar Beachfront Resorts
brand. The agreement has an initial term of 30 years and the option
to renew for additional terms of 20 years upon mutual agreement.
-- The agreement is expected to add up to 24.3k rooms across 70 properties
to IHG's system over the next two years. Of these, 27 properties (8.2k
rooms) still require additional approvals from third parties in order
to join IHG. The total of up to 70 properties would be equivalent
to growth of 2.8% on IHG's global estate of 880.3k rooms at the start
of 2022. The first rooms are expected to come into IHG's system in
December this year, with these representing approximately half of
the total rooms subject to the overall agreement.
-- The 70 properties are all beachfront resorts. They exclude Iberostar's
other operations, such as its smaller portfolio of urban hotels, and
also exclude Iberostar's interests in Cuba. The approximate geographic
split of revenues from the selected portfolio of 70 hotels in 2019
was: Mexico 22%; Dominican Republic 13%; Jamaica 8%; Brazil 5%; Spain
40%; other EMEAA region locations 12%.
-- A pipeline of six further Iberostar Beachfront Resorts properties,
representing 3k rooms, is also expected to be added to IHG's pipeline.
This pipeline will increase as IHG and Iberostar work together to
grow the brand's footprint through the long-term commercial agreement.
-- The total gross revenue of the existing portfolio of 70 hotels was
approximately $1.3bn in 2019, equivalent to growth of over 4% on IHG's
$27.9bn of total gross revenue. Under the agreement, IHG will receive
marketing, distribution, technology and other fees in a manner similar
to its existing asset light model.
-- IHG's fee structure will ramp-up over a period through to 2025 as
the hotels increasingly integrate onto IHG's platform. By 2027, representing
year five of the agreement, annual revenue recognised within IHG's
fee business is expected to be in excess of $40m, with a broadly similar
amount additionally recognised within System Fund revenues.
-- Reflecting integration investment, the net impact on IHG's operating
profit from reportable segments is expected to be modestly negative
in 2022 and 2023. It is then expected to turn positive in 2024, before
ramping up significantly from 2025 with the final step up in the fee
structure and the expected shift in distribution channel mix.
--S--
For further information, please contact:
IHG Investor Relations: Stuart Ford (+44 (0)7823 828 739);
Aleksandar Milenkovic (+44 (0)7469 905 720);
Joe Simpson (+44 (0)7976 862 072)
IHG Media Relations: Amy Shields (+44 (0)7881 035 550); Alex
O'Neil (+44 (0)7407 798 576)
Iberostar Media Relations: Doris Casares (+34 616 493 918); Concha Ramos (+34 679 143 999)
Notes:
* Recent awards include:
-- "Best of the Best 2022" by Tripadvisor UK (16 Iberostar hotels awarded)
-- "Travellers' Choice 2022" by Tripadvisor UK (42 Iberostar hotels awarded)
-- "Traveller Review Awards 2022" by Booking.com (69 Iberostar hotels awarded)
-- "HolidayCheck Special Award 2022" by HolidayCheck Germany (8 Iberostar hotels awarded)
About IHG Hotels & Resorts:
IHG Hotels & Resorts [LON:IHG, NYSE:IHG (ADRs)] is a global
hospitality company, with a purpose to provide True Hospitality for
Good.
With a family of 17 hotel brands and IHG One Rewards , one of
the world's largest hotel loyalty programmes, IHG has over 6,000
open hotels in more than 100 countries, and more than 1,800 in the
development pipeline.
- Luxury & Lifestyle: Six Senses Hotels Resorts Spas ,
Regent Hotels & Resorts , InterContinental Hotels & Resorts
, Vignette Collection , Kimpton Hotels & Restaurants , Hotel
Indigo
- Premium: voco hotels , HUALUXE Hotels & Resorts , Crowne Plaza Hotels & Resorts , EVEN Hotels
- Essentials: Holiday Inn Hotels & Resorts , Holiday Inn Express , avid hotels
- Suites: Atwell Suites , Staybridge Suites , Holiday Inn Club Vacations , Candlewood Suites
InterContinental Hotels Group PLC is the Group's holding company
and is incorporated and registered in England and Wales.
Approximately 325,000 people work across IHG's hotels and corporate
offices globally.
Visit us online for more about our hotels and reservations and
IHG One Rewards . To download the new IHG One Rewards app, visit
the Apple App or Google Play stores.
For our latest news, visit our Newsroom and follow us on
LinkedIn , Facebook and Twitter .
About Iberostar Hotels & Resorts:
Iberostar Group is a 100% family-owned Spanish multinational
company that boasts over 65 years' experience in the tourism
industry and business origins dating back to 1877. Its main line of
business is Iberostar Hotels & Resorts, which includes the
portfolio of up to 70 hotels in 15 countries under this agreement,
with a global team of more than 25,000 people of 95 nationalities.
The Group has become an international benchmark by promoting a
responsible tourism business model focused on caring for people and
the environment. The Wave of Change movement, a pioneering and
innovative initiative from Iberostar, reflects the company's
specific commitment to the environment and oceans, and its efforts
to promote these concerns to society as a whole. With
sustainability as the driving force and lever behind the business,
the company places the circular economy at the centre of its
strategy and is working on its own 2030 agenda to be waste-free by
2025, carbon-neutral by 2030, 100% responsible in its seafood
supply chain by 2025, and to improve the health of the ecosystems
that surround its hotels, among other goals. Iberostar was the
first hotel chain to remove single-plastic use amenities in all
their hotels worldwide back in 2020. The company is a leader in
quality and drives differentiation in the customer experience
through constant product innovation and commitment to
digitalization.
Iberostar Group is advisor to UNWTO, WTTC and World Economic
Bank, and has been recognized at international level supporting and
participating as speaker at Harvard University, Stanford
University, COP 25-26-27, OECD and FITUR amongst others. The
company has received several international awards including Eco
Trophea Germany (2022) and WTM Latin America Responsible Tourism
Award (2022), and has been recognized by several international
media amongst the Best International Resorts in Europe and The
Americas.
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as
defined under United States law (Section 21E of the Securities
Exchange Act of 1934) and otherwise. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as 'anticipate', 'target', 'expect',
'estimate', 'intend', 'plan', 'goal', 'believe' or other words of
similar meaning. These statements are based on assumptions and
assessments made by InterContinental Hotels Group PLC's management
in light of their experience and their perception of historical
trends, current conditions, expected future developments and other
factors they believe to be appropriate. By their nature,
forward-looking statements are inherently predictive, speculative
and involve risk and uncertainty. There are a number of factors
that could cause actual results and developments to differ
materially from those expressed in or implied by, such
forward-looking statements. The main factors that could affect the
business and the financial results are described in the 'Risk
Factors' section in the current InterContinental Hotels Group PLC's
Annual report and Form 20-F filed with the United States Securities
and Exchange Commission.
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