IHG gains Europe’s best luxury resort as it buys Six Senses for $300m

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IHG, the owner of the InterContinental, Holiday Inn, Crowne Plaza, Kimpton etc brands, announced a surprise acquisition yesterday.

IHG is paying $300m to acquire Six Senses Hotels.  If this seems cheap, it is because Six Senses does not own any of its properties.  IHG is simply buying the brand, 16 management contracts plus a further 18 signed deals and a ‘work in progress’ pipeline of 50 projects.

Six Senses generated just $13m of management fees last year, so IHG is paying a substantial multiple to acquire the chain.

Six Senses Maldives

Where can I find Six Senses?

Six Senses is, at its best, a true luxury hotel group in a way that none of IHG’s other brands are (sorry InterContinental).  It instantly becomes the top brand in the portfolio.

If you look at the list of hotels here, you will be struck by the inclusion of some highly attractive destinations such as Fiji, Bali, Seychelles and the Maldives.

The acquisition also comes with two Evason resorts thrown in which will presumably be sold or rebranded:

Six Senses Seychelles

IHG has also acquired the Six Senses spa operation which has some independent outlets.  It used to manage the spa in the Etihad lounge at Heathrow until recently, for example, and still runs the spa in the Abu Dhabi lounge.

The plan is to expand the chain to 60 properties over the course of the next 10 years.

The jewel in the crown, perhaps surprisingly, is not a beach resort.  The property in Portugal, Douro Valley, is widely regarded as the most luxurious resort in Europe (photo below).   It is set outside Porto and has an exceptional reputation for its rooms, food and spa.

That said, it isn’t all great news.  The two Singapore hotels opened recently and were an experiment in breaking into the ‘urban’ market.  They are generally seen as a disaster.  They were not even designed for Six Senses – I believe the two hotels were originally joining Starwood until the Marriott acquisition.  Whilst Six Senses is planning more city centre hotels, such as a New York project in development, there is no proof it knows how to pull them off.

Will the Six Senses properties join IHG Rewards Club?

You would assume so, although the experience of the recent Regent Hotels acquisition is that it will take around 18 months for this to happen.

One thing seems certain – you won’t be booking any of these hotels for 70,000 IHG Rewards Club points, which is the current cap.  These are very expensive properties in general when paying cash.  We may see IHG carving out a separate category for them, in the same way that Hilton has broken its caps to charge 120,000 Hilton Honors points for the new Waldorf Astoria Maldives.

What happens to Regent Hotels now?

Good question.

When IHG bought Regent Hotels recently it had just six properties.  The plan was to do some shuffling between InterContinental and Regent to have two slightly differently positioned luxury brands.

Six Senses confuses things even further.  The logical answer would be to move the InterContinental beach resorts under the Six Senses brand – although that would require upgrades in many cases – and potentially abandon Regent, putting the InterContinental flag on the current properties.  (Montenegro could go to Six Senses.)

I doubt this will happen due to the obsession with having lots and lots of brands, and IHG has just signed the contract for a new Regent in Kuala Lumpur.  Marriott has not culled a single brand since it bought Starwood and now has an unmanageable 29 brands in its portfolio.

I’m not sure that the Six Senses acquisition is great new for fans of luxury hotels.  They tend to fall in quality when brought under the control of major groups which put financial returns front and centre.

Once upon a time, before Marriott bought it, The Ritz-Carlton was the equal of Four Seasons.  Whilst there have been some promising openings recently, such as the sublime Kyoto, few people would make that comparison now.  Six Senses has a more mixed reputation across its portfolio, however, so IHG may have less of an impact.

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Comments

  1. Shoestring says:

    Today’s quiz question what *is* the sixth sense to which the hotel chain is alluding?

  2. As a fan of Six Senses, I have to say I’m torn by the acquisition! Let’s hope IHG don’t ruin it!

  3. Nigel the Pensioner says:

    ….perhaps that they would be taken over?!
    Seriously this is surprising news as 6 senses really do deliver the luxury and atmosphere that they promise when in resort. The Thai, Vietnam and Cambodian properties being, imho, prime examples – especially Yao Noi. Our trip to the I/C in Da Nang will be a golden opportunity to compare and contrast what IHG are going to be up against or whether they too currently have similarly run projects.
    I feel that this is an attempt to show Marriott that they are not the only group to allegedly have a series of true prime brands. I just hope that they (IHG) allow good resort practices learnt from 6 senses to prevail which I think by and large Marriott has done, including the Ritz Carltons, with which I have no complaints.
    Depending on your perspective, I am put off by the constant pushing by 4 Seasons of their Kids Clubs, Rob, which immediately conjures up the wrong image to me for a luxury resort (albeit not completely incompatible with pre teens), whereas the RC offer this but don’t have it to the forefront. As I recall, the Mandarin Oriental don’t even mention such facilities!!

    • IC Danang is absolutely incredible. Up there with the best hotels I’ve stayed in such as Mandarin Oriental and The Chedi.

      • Agreed. Managed to use two free night certs I earnt for doing pretty much nothing in the first Accelerate promo a few years back.
        IC Danang is fantastic.

        Accelerate (and it’s replacement), not so much anymore 🙁

  4. Great! Douro Valley is on my list to visit. Still gutted IHG didn’t buy Belmond. Hopefully LV will set it on to a chain we can redeem our points at.

  5. Chrisasaurus says:

    Singapore properties will be sighted then, if they nixed a SPG franchise because of the Marriott deal only to wind up a holiday Inn…

  6. Had a great week in Yao Noi about 5 years ago. All big villas with a private pool in each. What’s the protocol on these things? Do I now try and crowbar this fact in to as many comments as possible?

  7. Matt de Monte says:

    This is such a shame. A small luxury brand swallowed up by a large group. I have stayed at a number of SS resorts around the world and their individualism and quirkiness is what sets them apart. Service is tailored to the customer and the experiences they offer are unique. Some people don’t like SS as it’s not marbles bathrooms and gold taps however for eco conscious people they have set the standards for sustainability. I am sure IHG’s motivation will be to make money by streamlining and cost cutting which will dilute the SS offering. I will be watching with interest.

    • Six Senses wasn’t run by a little old couple, it was run by a major international private equity group. That’s not to say that IHG won’t kill what made it special, but neither was Six Senses in recent years a labour of love with a visionary founder / CEO.

      • Unlike the the couple who created the two Evason properties that happened (for whatever reason) to fall under Six Senses control. They’ve since set up their own brand of resorts in Thailand and Maldives which you’ll know as Soneva. They have more properties in The Maldives opening in the next couple of years. They’re very hands on in terms of the operation and are often in residence. Without blowing my own Range Rover trumpet, I’ve stayed in both Maldives properties on holiday last year and they wee all over Six Senses in terms of staff attentiveness, quality of accommodation and holistic experience. Until then I’d have held Six Senses (Zighy Bay and Yao Noi) as the epitome of barefoot luxury and serenity.

      • Just yesterday I was reading a harrowing report of the rape of a woman (and subsequent attempts of a cover up by hotel management) at the Six Senses Zil Payson in Seychelles: https://www.flyertalk.com/forum/showpost.php?p=28499058&postcount=35

        That thread includes a pretty outrageous ‘defence’ from Six Senses CEO Neil Jacobs.

        This unforeseen purchase by IHG makes me wonder if the PE group owning SS had been looking to wash their hands of the brand.

      • Matt de Monte how can you be eco conscious yet jet around the world to all these SS resorts in remote locations!

      • Matt de Monte says:

        Yes. Run by Pegasus I think but seemed to have kept to the original owners values. I first went to a SS property when they opened NVB in Vietnam and loved their concept. I’ve now visited a number a fair few times. The fact they don’t have a large portfolio may mean their differentiating factors get eroded. And yes I know the Soneva story. I’ve been to SK for the last couple of years and agree it’s a notch above SSYN which is probably the best SS property. Let’s hope this works out well for everyone concerned.

  8. Andrew L says:

    Excellent. 18 new Holiday Inn’s on the way!!

  9. So IHG points for paying for Spa treatment in AUH lounge?

    As a corporate guest, a luxury brand is a welcome addition, as I tend to visit them using accrued points from stays. Perhaps a less welcome addition for those that regularly visit using their own money.

  10. You’ll have to start putting up with more riff-raff like me at these properties once they start taking IHG points.
    Although as you suggest, these will be the stimulus for IHG to breach their 70k cap and once they have then other IHG properties will begin to creep up too 🙁

  11. GUWonder says:

    Evason sounds like it was Soneva, and while Soneva’s founders sort of split from Six Senses, it seems like Evason kept on with Six Senses in this way. Why would Evason bail out of Six Senses at this point but not have done so earlier than this week?

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