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IHG chief rules out large scale hotel mergers

CEO Richard Solomons says hotel group has sufficient scale and will not be growing for the sake of it
09/03/2016

Pictured: IHG chief executive Richard Solomons

InterContinental Hotels Group (IHG) is looking at expanding its portfolio through smaller deals and won't be growing for the sake of it, according to its chief executive.

Last year saw a number of huge deals in the hotel industry, with Marriott purchasing Starwood and AccorHotels buying FRHI. However, IHG CEO Richard Solomons revealed that he thought his firm was big enough.

"We are very big, one of the biggest in the world even after consolidation,” he said. “So we have sufficient scale.”

He added that IHG would more likely be interested in doing smaller deals, along the lines of its $430 million (£302m) purchase of boutique chain Kimpton in 2014.

"For us, we're quite likely to look at other deals like a Kimpton-type deal, which is small. We can add value quickly, rather than just adding a business because we want to be bigger," said Solomons.

IHG runs more than 5,000 hotels, with brands including Crowne Plaza, Holiday Inn and InterContinental. The firm currently has 5 per cent of the world's hotel rooms and 15 per cent of the development pipeline for new hotel investments.

Solomons added that IHG is not worried about becoming a takeover target.

He said: "If somebody comes along and wants to make a bid, the board will look at it. We're certainly not seeking it but as a public company that's the world you live in.

“We could grow faster, but we won't compromise quality," he added. "It's not about a dash for growth.”


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