For IHG Hotels & Resorts, the largest United Kingdom-based hotel firm, the U.K. continues to represent opportunities for notable growth of its hotel brands and property portfolio.
Matt Walton, head of development, United Kingdom and Ireland, said IHG’s “confidence is really mirrored in what we see from owners within the IHG branded estate.”
Fueling that confidence is a mix of IHG successfully scaling its brands and securing opportunistic acquisitions. In IHG's own brand stable, Walton cited the rapid growth of IHG's Voco brand across the U.K. and Ireland and the debut of its Garner brand in the U.K. with the March 3 opening of the 80-room Garner Hotel Preston Samlesbury north of Manchester. Then, last month, IHG announced the acquisition of German brand Ruby Hotels, which has a healthy opened and pipeline portfolio in the market.
On Thursday, IHG announced another eight hotel signings and more than 900 rooms in the U.K. and Ireland, including hotels affiliated with its brands Crowne Plaza and Hotel Indigo. The announcement brings its portfolio in the region to 362 hotels and 25 in its pipeline.
There are 16 Voco hotels in the market and another 10 in the pipeline, including the 142-room Voco Zeal Exeter Science Park in southwest England. The hotel is part of a partnership with Zeal Hotels that Walton said will drive further innovations around sustainability and hotel construction and operations.
Joanna Kurowska, IHG's vice president and managing director for the U.K. and Ireland, said the company's brand strategy is focused on “thoughtful growth,” which prioritizes flexibility with existing and new types of hotel owners and creating hotels that coexist within the existing estate and brand.
“Opened last week, the Voco Zeal Exeter is an excellent example of how out of a partnership we have with an owner came a project that is unique in the U.K., possibly one of the most unique projects in Europe. The hotel is being built in a very different way to how hotels traditionally are built. That is one innovation that is credited to Zeal. Sustainability is at the very heart of the definition of the brand,” she said.
IHG also sees plenty of growth in its London portfolio, Kurowska said. The company announced two new signings: the 93-room Voco London Marylebone, which is owned by J Marylebone Limited and will be operated by RBH, and the 265-room Holiday Inn Express London Woolwich, which is owned by Riverside House Limited.
“I am particularly encouraged to see two new IHG hotels come to London, a city where we are seeing healthy growth. All of this fantastic progress positions us well for a successful long-term future across the country,” Kurowska said.
Last year, IHG also announced a partnership with German firm Novum Hospitality. That April 2024 deal is set to double IHG’s presence in Germany to more than 200 hotels across several brands, as well as adding Novum’s 108 existing and 11 pipeline hotels in Germany, Austria, The Netherlands and the U.K. to IHG’s distribution platform.
Ruby brand acquisition drives growth
IHG is investing in its upscale and luxury brands. In the last decade, IHG acquired Kimpton Hotels & Restaurants, bought a 51% stake in Regent Hotels & Resorts and opened its first soft-brand Vignette Collection hotels in the U.K.
“We have big ambitions with [brand Hotel] Indigo, with some showcase openings this year such as Leeds, Gloucester, London Clerkenwell and London Shepherds Bush. In the premium space, we continue to push,” Walton said.
Ruby, which describes itself as a “lean luxury” hotel brand, is another prong of IHG's strategy in upscale and luxury, Kurowska said. She added the brand targets “urban micro” locations.
IHG Hotels & Resorts bought the Munich-based hotel firm Ruby GmbH for €110.5 million ($115.8 million) in mid-February. Ruby has 20 hotels and 3,483 rooms open in Europe, with 11 hotels and approximately 2,500 rooms in the pipeline. The deal includes potential additional payments up to €181 million between 2030 and 2035 depending on an expanded pipeline.
“Ruby has an excellent reputation from many cities in Europe and an incredible pipeline. Its ratio of pipeline to opened hotels is incredible, and IHG will help it grow,” Kurowska said.
Walton said IHG already has a plan to scale the Ruby hotel brand.
“It does fill a gap in the IHG portfolio and is in high-barrier-to-entry markets. Again, it is about thoughtful growth,” Walton said. “We are very, very excited in the sense of the big growth aspirations where we think Ruby can get to as a brand over the next 10 years. There are about 120 sites, moving from Europe, going into America, Asia. It has a lot of growth potential. … three London hotels in the pipeline, Dublin, Edinburgh, and there will be more.”
In IHG's full-year 2024 earnings presentation in February, CEO Elie Maalouf praised Ruby's business model.
“The urban micro space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand Ruby’s strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions,” Maalouf said in an earnings release.
Across 2024, IHG grew its net portfolio by 4.3%, opening 371 hotels and approximately 59,100 rooms for a total portfolio of 6,629 hotels and approximately 987,000 rooms.