Sell 24% stake in company that planned to develop 19 Holiday Inn Express hotels in India
British multinational hotels company InterContinental Hotels Group PLC (IHG) is divesting 24% stake in its joint venture (JV) with Duet India Hotels (DIH).
The partnership, with the hotel investment arm of global asset manager Duet Group, was formed in April 2011 to develop 19 new Holiday Inn Express hotels across India. Between them, the two companies were looking to invest a total around $125 million.
Pascal Gauvin, chief operating officer - India, Middle East, Africa, InterContinental Hotels Group, told DNA Money, "We can confirm that IHG is selling its equity stake in a multi-year investment back to Duet India Hotels Group. This is line with our global, asset-light strategy, which allows us to grow faster with limited capital investment. We will continue to operate the existing properties in our portfolio with Duet." He was in Mumbai for the Hotel Investment Conference - South Asia (HICSA) 2017 concluded on Thursday.
Gauvin, however, did not share financials associated with this development or for that matter, the operational status of all the 19 Holiday Inn Express hotels to be developed by the joint venture. Five years ago, IHG had agreed to make a multi-year investment of $30 million into this partnership. Back then the plan was to add around 3,300 rooms to IHG's India development pipeline of over 10,000 rooms (46 hotels). The 19 hotels were expected to be operational by 2016.
IHG also opened Chennai's first 202-room Holiday Inn hotel at the Old Mahabalipuram Road IT Expressway. The hotel company said it is on track to have 150 operational hotels or in the pipeline within the next 10-15 years. This growth will be driven by the Holiday Inn brand family with a distinct focus on Crowne Plaza and InterContinental Hotels and Resorts in key gateway cities.
IHG has also signed three Holiday Inn Express hotels in India with existing owners. This includes the Holiday Inn Express and Suites in the Delhi and NCR area, Holiday Inn Express and Suites Gurgaon Sector 90 with Crowne PropBuild Pvt Ltd, which currently own Crowne Plaza Rohini as well as Holiday Inn Express Kolkata Airport with DS Group which currently own Crowne Plaza Jaipur Tonk Road with IHG. All the three Holiday Inn Express hotels are set to open in the next two to three years.
As of December 2016, IHG operates 29 hotels between InterContinental, Crowne Plaza, Holiday Inn, and Holiday Inn Express brands in India. The company's hotel development pipeline includes 36 hotels (6,927 rooms) totalling growth of more than 125% over the next three to five years. It is also looking to introduce new brands like Kimpton Hotels & Restaurants to the Indian market over time adding the InterContinental Hotels and Resorts brands to more gateway cities in the country.
Marking the brand's foray into the Indian hospitality market, the first Holiday Inn Express hotel under the JV became operation in Ahmedabad in November 2012. The 173-room property in the central business district of the city mainly catered to the growing demand for mid-market hotel rooms amongst business travellers. The JV was also working on developing two hotels in Chennai, one in Hyderabad and two in Navi Mumbai.
While a hotel each in Chennai and Hyderabad have become operational already, the status of other developments – the second hotel in Chennai and two hotels in Navi Mumbai -- could not be ascertained.
Headquartered in Denham (UK), IHG has over 742,000 rooms and 5,028 hotels across nearly 100 countries. Its brands include Candlewood Suites, Crowne Plaza, Even, Holiday Inn, Holiday Inn Express, Hotel Indigo, Hualuxe, InterContinental, Kimpton Hotels and Resorts and Staybridge Suites.
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- The partnership was formed in April 2011 to develop 19 new Holiday Inn Express hotels across India
- InterContinental Hotels Group PLC and Duet India Hotels were looking to invest a total around $125 million
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