IHG goes deeper into resorts with Iberostar deal

The arms race in the hotel resort space has ticked up a notch with the news that IHG Hotels and Resorts has agreed a licensing deal with Iberostar Hotels and Resorts.

Like a number of other agreements we’ve seen lately this is not a straight up acquisition. Iberostar will retain 100% ownership but up to 70 hotels (24.3k rooms) will be added to IHG’s system under the Iberostar Beachfront Resorts brand.

The agreement gives IHG a licence to the Iberostar Beachfront Resorts brand. The agreement has an initial term of 30 years and the option to renew for additional terms of 20 years.

The total gross revenue of the existing portfolio of 70 hotels was around $1.3 billion in 2019, equivalent to growth of over 4% on IHG’s $27.9 billion of total gross revenue. Under the agreement, IHG will receive marketing, distribution, technology and other fees, similar to its existing asset light model.

The 70 properties are all beachfront resorts.They exclude Iberostar’s other operations, including its small potfolio of urban hotels, as well as its interests in Cuba. The approximate geographic split of revenues from the selected portfolio of 70 hotels in 2019 was:

  • Mexico 22%
  • Dominican Republic 13%
  •  Jamaica 8%
  • Brazil 5%
  • Spain 40%
  • other EMEAA region locations 12%

What they said

Keith Barr, CEO, IHG Hotels & Resorts, said: “As we continue to expand the footprint of our world‑famous brands, we are always looking at exciting, sustainable growth opportunities in areas that can further enhance our offer for guests and owners.

Guests have told us of their wish for increased choice of resort and all-inclusive destinations within our brand portfolio. We are delighted to address that by working with such a well-respected, experienced and like-minded partner as Iberostar, and to see more amazing hotels join our system that continues IHG’s growth in so many of the world’s most attractive markets and destinations."

Sabina Fluxá, vice-chairman and CEO, Iberostar Group, said: “With this agreement, we set the path to continue the outstanding growth that began 40 years ago with the creation of the Iberostar brand and which has positioned us among the top resort brands in the world. The alliance with IHG combines our strengths, represents a decisive step forward in the distribution of Iberostar’s beachfront resorts, and reinforces our position as a benchmark in responsible tourism. By working together we will grow our portfolio and we are really looking forward to hosting IHG loyalty members in our collection of premium and luxury beachfront resorts and all-inclusive properties.”