The International Hotels Group (IHG) is buying into premium-centric Regent Hotels and Resorts, the company announced this week, also revealing a roadmap that will focus on the expansion of its presence in the luxury hotel market. The deal is worth $39 million and set for completion in the second quarter of 2018.
In a press release, IHG said the Regent brand acquisition will be paid in cash and in three tranches. The initial payment of $13 million will be transmitted this year and remaining balance in 2021 and 2024. It is understood that the deal includes a clause that will see IHG eventually gaining full ownership of Regent.
“IHG has the option to acquire the remaining 49% stake in a phased manner from 2026,” the company reported.
IHG is projecting that total cost of the full transaction, which will bring the well-known Regent name under the company’s portfolio, will not exceed $100 million.
Growth And Rebranding Initiatives
In acquiring Regent, IHG said its operation will take a leap into “the top-end of the luxury segment,” adding that the hotel and resort brand name is “synonymous with timeless modernity, understated luxury and intuitive service.”
“The Regent brand has set the benchmark for luxury hotels globally since it was founded in 1970. It has a world-renowned heritage, built around the elegant, timeless design of its hotels and rooted in its focus on delivering a truly unique and superior luxury experience for guests,” the company said.
Likewise, IHG revealed plans to further grow the famous Regent name and build 40 hotels bearing the same brand “in key global gateway city and resort locations over the long term.” The fresh acquisition is in line with the target to accelerate growth for the company, IHG said.
Primed For Transformation
It’s noteworthy too that IHG gaining majority stake in Regent Hotels will allow the former to compete in equal terms with the more established brands in the luxury hotel market, hospitality consulting firm C9 Hotelworks said in a report.
“For IHG the acquisition of a luxury hotel brand is key in keeping pace with groups such as Marriott International, ACCOR and Hilton,” the report added.
Case in point is the plan to refurbish and rebrand the InterContinental Hotel Hong Kong, which according to IHG “is primed to undergo a spectacular transformation that will position it as one of the top hotels not only in Asia, but also as one of the world’s most iconic hotels.”
The hotel first opened its doors in 1980 as The Regent Hong Kong and once the renovation works have been completed, it will resume operations under the banner of its original name.