Earlier this year Skift reported that InterContinental Hotels Group (IHG)  was looking to buy “an asset light, small luxury brand company or companies with a strong customer proposition” with an aim to increase their footprint in the luxury hotel segment.

“We are very focused on the sweet spot of acquiring an asset light, small luxury brand company or companies with a strong customer proposition, [and] strong owner proposition that we can grow,” Barr told investors in an earnings call following the release of IHG’s full-year results.

“There are a number of those located throughout the world right now that we’ve had conversations with that are interesting.”

‘Asset light’ in the hotel industry refers to a business model where hotel management companies invest little or no money in building hotels. Developers build the hotel adhering to the company’s brand standards and pay a management fee to the hotel company which operates and promotes the property. IHG, one of the largest hotel companies in the world, owns less than 10% of the 5000+ hotels they operate.

InterContinental Hotel Group (IHG) today announced that they would buy 51% of Taiwan-based Regent Hotels and Resorts, with an option to buy the remaining 49% in the future.

Taiwan based Regent Hotels has a reasonably long standing in the hospitality industry and the ownership has changed many hands in the past, including Four Seasons and Carlson Rezidor, now known as the Radisson Hotel Group.

All of Regent’s hotels are based in Asia and the portfolio currently consists of six hotels in Beijing, Taipei, Berlin, Chongqing, Montenegro, and Singapore. There are three more under development in Harbin (China), Jakarta (Indonesia), and Phu Quoc (Vietnam).

IHG also announced that the InterContinental Hong Kong, which way back in 1980 opened as a Regent hotel will be closed for renovation and will join the Regent portfolio in 2021, making it the flagship of the Regent brand. That is one less property to use the IHG Ambassador perks at!

With this acquisition in place, IHG has 13 brands in its portfolio. The group aims to grow the Regent brand from six to forty and intends to position Regent as its top-end luxury brand, even above the InterContinental Hotels & Resorts brand.

IHG CEO, Keith Barr said that this acquisition is a part of IHG’s strategy on increasing its footprint in the 60 Billion US$ luxury market. Additionally, Asia is a crucial growth market for all hospitality brands, and the fact that Regent is based out Asia will give IHG a stronger foothold in this market. IHG expects to grow Regent from its current 2,000 rooms to over 10,000 rooms in the long term.

Bottomline:

IHG needed to increase its footprint in the luxury hotels space. The group currently operates 202 InterContinental brands and Regent’s acquisition at this low price makes sense. I am looking forward to staying at a Regent property in future and find out if they are better than the top InterContinental hotels.

What do you think of IHG’s acquisition of Regent Hotels?