As was rumoured a few weeks ago, IHG announced today that it is buying Principal Hotels, and two De Vere properties, from Starwood Capital.
(Starwood Capital no longer has any connection to Starwood Hotels or Starwood Preferred Guest, although it did at one point.)
The acquisition is a joint venture with French company Fonciere des Regions which is acquiring the underlying property assets.
This is a great move by IHG. In fact, I think it is a better deal than buying Regent Hotels. Principal has spent a substantial amount of money in recent years acquiring historic UK city centre hotels and upgrading them.
By coincidence, I was in St David’s in Cardiff on Wednesday for the Qatar Airways press event. I was also in the York hotel last year and was impressed by what has been done to it.
There are the hotels which are coming into the IHG family following the acquisition:
The Principal London (just reopened, the old Russell Square)
The Principal Edinburgh Charlotte Square
The Principal Edinburgh George Street (pictured above)
The Principal Met Hotel (Leeds)
The Principal York
De Vere Oxford Thames
The Grand Birmingham (pipeline)
The Principal Manchester (see below, the old Palace)
The Principal Blythswood Square (Glasgow)
The Principal Grand Central (Glasgow)
The Principal St David’s (Cardiff)
The Principal Oxford Spires
De Vere Wotton House
The hotels will be mainly rebranded as Kimpton with one or two InterContinentals. Some have also been earmarked for IHG’s as-yet-unnamed new upscale brand.
This is a major development for IHG, which has struggled to do much with the Kimpton name since it was acquired. Starwood Capital spent a vast amount of money on the hotels it has refurbished and, whilst potentially not quirky enough for Kimpton, will not require much to be changed.
It is a major kick-start for Kimpton in Europe. To date there is only one hotel in Amsterdam, which we are reviewing again very soon. A Paris property is under development but that is a while away. Adding the best of the Principal properties is a major boost.
That said, the ‘Principal’ brand has started to get traction in the UK as a name associated with high quality city centre hotels and it will be a shame to ditch it, but obviously IHG – as a global company – won’t want to run a UK-only chain.
Keith Barr, chief executive officer of IHG said:
“We are focused on continuing to expand our leadership in luxury and upscale, which are both high-value segments with significant growth potential.
“Bringing Kimpton to such an important market as the UK is a key part of our plans, as is the introduction of our new upscale brand, which will provide an exciting, differentiated offering to both guests and owners.
“Together with the recent addition of Regent Hotels & Resorts to our portfolio, we are building real momentum behind our plans to deliver industry-leading net rooms growth.”
Don’t rush to make bookings. The acquisition will not be completed until later this year and the hotels will still need to be integrated into the IHG booking system. There will also be some disruption during the rebranding which will take place over two years. Overall, though, this is very promising news for UK business travellers with IHG status.
You can find out more on the IHG website here.
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