Intercontinental boosts Holiday Inn brand

InterContinental Hotels signalled an expansion of its Holiday Inn brand in the UK today after clinching a franchise deal with one of its rivals.

The group will take over management of up to 16 hotels owned by Queens Moat Houses under a 20-year agreement and is preparing to rebrand 11 of those as Holiday Inn.

The brand has been the star performer in InterContinental’s UK portfolio and revealed in May that revenues per room were up 5.2% in the first three months of the year.

Among the hotels to be become Holiday Inns are properties at Harrogate, Doncaster, Stratford upon Avon, Solihull and Manchester Airport.

InterContinental has also promised to rebrand two hotels at Glasgow and Nottingham as Crowne Plaza, with three more possibly converted at a later date.

The franchise deal brings the number of hotels operating under its brands in the UK to 227, offering 31,909 rooms.

Chief executive Andrew Cosslett said: “This deal is another important step in the development of our brand portfolio in the UK market.”

InterContinental has been reshaping its business to concentrate on management and franchises over the past year and this strategy has seen it offload ownership of almost all of its estate in the UK.

In March, InterContinental sold 73 hotels to a consortium of investors called LRG Acquisition for £1bn (€1.5bn). This followed the sale of 13 hotels in December for $425m (€340.7m).

Shareholders have approved of the strategy because it reduces the group’s exposure to swings in demand for hotel accommodation.

It has also led to the return of £2bn (€2bn) to investors, while the long-term management contracts provide a reliable source of future revenues.

Today’s deal comes a month after InterContinental signed a franchise agreement for five Holiday Inn hotels in the UK owned by Stardon, a joint venture company formed between Starwood Capital Europe and Chardon Hotels.