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Holiday Inn owner InterContinental Hotels Group has acquired its 20th hotel brand as it reported stronger profits and outlined plans for further expansion.
The FTSE 100-listed group said it had snapped up ‘lean luxury’ specialist Ruby Hotels for an initial £87.6million.
Ruby Hotels was founded in 2013 and currently has 20 hotels, including three in London.
The brand says that by ‘streamlining things behind the scenes and being smart with every detail, we can offer unforgettable, city-centre locations at a fraction of the normal cost’.
IHG said Ruby has a pipeline for 10 further planned hotels and it intends to grow the brand ‘substantially further’, with plans to expand into the US.
IHG chief executive, Elie Maalouf, said: ‘This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience of integrating and growing brands and hotel portfolios.
‘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.’
Deal: Holiday Inn owner InterContinental Hotels Group has acquired Ruby Hotels
It came as IHG revealed operating profits grew by 10 per cent to £890million in 2024, as it benefited from more hotel openings.
IHG, which has 355 UK hotels, reported that revenues jumped 7 per cent to £1.83billion for the year.
Global revenue per available room increased by 3 per cent, with this accelerating to 4.6 per cent in the final quarter of the year.
IHG said it was boosted by the opening of 371 hotels over the year, taking its estate to a total of 6,629 hotels.
It added that it continued to make progress with Holiday Inn Express, its largest single brand, which has more than 3,200 hotels, with a planned pipeline of more than 600 extra sites.
On dividends, IHG said: ‘The Board is proposing a final dividend of 114.4¢ in respect of 2024, an increase of 10 per cent on 2023.
‘With the interim dividend of 53.2¢ paid in October 2024, the total dividend for the year would therefore be 167.6¢, representing an increase of 10 per cent on 2023.’
IHG shares fell 1.22 per cent or 130.00p to 10,565.00p on Tuesday, having risen over 33 per cent in the last year.
John Moore, senior investment manager at RBC Brewin Dolphin, said: ‘IHG has booked a strong set of results.
‘They reflect the renewed focus and investment in the business, which continues today with the acquisition of Ruby – the company’s twentieth brand.
‘Away from the solid numbers, there is also a subtle shift in the approach to shareholder returns, with the dividend reduced in favour of share buy backs – a move that is consistent with a more US approach to shareholder returns and, perhaps, reflects IHG’s desire to be as successful at attracting global investors as it is at attracting global travellers.
‘The share price has performed well over the last few years, but with plentiful investment opportunities and a growing demand for travel, there remains the potential for positive momentum.’
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