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IHG acquires 51% stake in Regent Hotels, eyes global luxury market

InterContinental Hotels Group (IHG) has acquired a 51% stake in Regent Hotels and Resorts (Regent) for US$39 million in cash. IHG will have the right to acquire the remaining 49% interest in a phased manner from 2026. IHG will bring Regent into its luxury brand portfolio and will accelerate its growth globally, with the intention to grow the brand from six hotels today to over 40 hotels in key global gateway city and resort locations in the long run.

In a statement to Marketing, IHG’s spokesperson said there will be no key personnel changes. The spokesperson added that despite Regent’s relatively limited footprint, it has good brand awareness in key markets, especially in Asia Pacific and China.

The acquisition is part of one of IHG’s new strategic initiatives focused on expanding its footprint in the fast-growing US$60 billion luxury segment.

This initiative is supported by the creation of a new dedicated luxury division to further enhance IHG’s capabilities in this area.

IHG’s spokesperson said the luxury division will comprise industry professionals across branding, luxury, operations, design, development and customer experience. The team will help drive IHG’s luxury offer, ensuring that its existing luxury brands continue to evolve and allow the group to bring in new brands to enhance the brand portfolio.

The luxury division will be funded by IHG’s efficiency programme, launched last September, to drive a series of new strategic initiatives to accelerate the group’s growth. These include strengthening the group’s loyalty programme, continuing to prioritise digital and technological innovation, as well as strengthening existing brands and adding new brands where the group sees greatest potential for growth.

The efficiency programme revolves around the group’s organisational structure to redeploy resources to leverage scale in the highest opportunity markets and segments. The organisational changes include combining Europe and Asia, Middle East and Africa into one business unit, and creating a new global marketing organisation and a new commercial and technology function.

(Read also: IHG says 2017 was its strongest performing year since 2010)

IHG’s CEO Keith Barr said the group sees a “real opportunity” to unlock Regent’s “enormous potential” and accelerate its growth globally. Steven Pan, executive chairman of Formosa International Hotels Corporation which owns and manages Regent, said IHG shares its vision for the brand and has the ability to make its ambition a reality.

“IHG has a deep understanding of how to protect what makes the Regent brand so unique and special, whilst at the same time ensuring that the brand can grow and thrive on a global scale,” Pan added.

Last year, IHG garnered a revenue of US$1,784 million for the year ended 31 December 2017, a 4.0% increase from 2016. Asia Pacific, Middle East and Africa witnessed a revenue of US$244 million, while Greater China posted a revenue of US$126 million.

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