IHG agrees huge franchise deal with Novum Hospitality

IHG Hotels & Resorts and Novum Hospitality have signed a long-term agreement which will see IHG double its presence in Germany to more than 200 hotels in almost 100 cities.

The agreement with Novum Hospitality, one of Germany’s largest private hotel operators, owned by David Etmenan, includes the following:

  • Up to 108 Novum Hospitality open hotels (15,334 rooms) and 11 hotels under development (2,369 rooms) are expected to join IHG’s system between 2024 and 2028. Conversion of the hotels to IHG’s system will happen in phases beginning in 2024, with the majority to take place over the next 24 months. This will increase IHG’s global system size by up to 1.9 per cent over the coming years.
  • A total of 52 open and pipeline hotels will join IHG through a collaboration between Holiday Inn and the niu, Novum Hospitality’s upper midscale brand. Novum Hospitality’s other brands, Yggotel, Select and Novum with 56 open and pipeline hotels will convert to IHG’s new midscale conversion brand, Garner, and the acora Living the City brand with 11 open and pipeline hotels will convert to IHG’s midscale extended stay brand, Candlewood Suites.
  • Under the agreement, IHG will receive franchise fees after the phased conversion of existing properties and upon the opening of the hotels under development. Additionally, standard assessments will be received into IHG’s System Fund, including those to cover the operation of IHG One Rewards, and marketing and reservation services. IHG will contribute key money capital expenditure that will reflect the phased conversion and timing of openings of this major portfolio of hotels.
  • The agreement includes an exclusivity arrangement for future Novum Hospitality hotels to join IHG’s leading brands and enterprise system, with an ambition to jointly develop further hotels over time.
  • The agreement has a term of 30 years and the option to renew for additional terms.

A total of 111 Novum Hospitality properties are in Germany, with the remaining eight in Austria, the Netherlands and the UK. Germany is one of Europe’s largest hotel markets, with strong domestic consumption, inbound and outbound travel. In 2022, there were over 450 million overnight stays in Germany, the second highest in Europe, and the country generated the highest number of international outbound travellers globally, around 100 million.

Novum Hospitality will adopt IHG brands and systems for this entire portfolio, becoming one of IHG’s largest franchisees globally, with access to IHG’s powerful commercial engine and technology platforms to drive hotel performance, efficient hotel operations and customer experience.

What they said

Elie Maalouf, CEO, IHG Hotels & Resorts, said: “This agreement demonstrates the appeal to owners of our powerful enterprise and IHG’s success in attracting excellent conversion opportunities to grow our system size. It also creates a strong domestic German platform to increase demand and brand awareness, as well as capture a larger share of the millions of outbound trips made each year across Europe and beyond.

David Etmenan, CEO and Owner, Novum Hospitality, said: “Partnering with IHG, one of the world’s leading hotel companies, equips our family-run business with the firepower needed to fortify our market presence across Europe. This collaboration enables us to concentrate on delivering exceptional hotel experiences while leveraging the globally acclaimed brand recognition of IHG. Forging a co-brand between the niu and Holiday Inn sees two perfectly complementary brands come together, enhancing our appeal to guests on a global scale.”