InterContinental Hotels Group (IHG) has agreed to buy the brands and operating companies of Six Senses Hotels Resorts Spas for $300 million in cash, the owner of the Crowne-Plaza and Holiday Inn chains said on Wednesday, in a move that beefs up its luxury portfolio.
IHG, which has been pressured by competition from online rental services like Airbnb, has looked to re-focus on competing with the sprawling luxury portfolios run by Marriott and Hilton.
IHG Chief Executive Officer, Keith Barr said of the deal that, “Six Senses is an outstanding brand in the top-tier of luxury and one we’ve admired for some time.” The deal will see IHG increase its total portfolio of luxury hotels to 400 properties with 108,000 rooms.
Six Senses Hotels Resorts Spas operates 16 hotels and resorts and 29 spas in 20 countries under the brand names Six Senses, Evason and Six Senses Spas. Aggressive development plans will triple the portfolio over the next five years with 18 management contracts signed in its pipeline, and more than 50 further deals under active discussion.
Future resort, hotel and spa openings are underway in Austria, Bhutan, Cambodia, China, Egypt, Fiji, France, India, Indonesia, Italy, Nicaragua, Switzerland, Taiwan, Thailand, Tunisia, United Arab Emirates and United States.
IHG said it expects to expand Six Senses, which generates fee revenues of over $13 million, to more than 60 properties globally over the next decade, including to the high-end West Chelsea, Manhattan area of New York City.
The acquisition of Six Senses by IHG from private asset management firm Pegasus Capital Advisors does not include any real estate assets and according to IHG would generate a return approximately equal to its cost of capital by the fourth year after the purchase.