UK: InterContinental Hotel Group (IHG) has bought Kimpton Hotels & Restaurants to create what it calls “the world’s largest boutique hotel business”.
UK: InterContinental Hotel Group (IHG) has bought Kimpton Hotels & Restaurants to create what it calls “the world’s largest boutique hotel business”.
Kimpton manages 62 hotels, totalling 11,300 rooms) across the US with a further 16 properties in the pipeline. It also operates 71 hotel-based destination restaurants and bars. Established in 1981 Kimpton is the largest independent boutique hotel and restaurant business in the US. Its Kimpton Karma Rewards programme has around 1.6 million members.
IHG says the acquisition makes it “the clear market leader in the boutique segment, the fastest growing segment in the industry”.
The transaction will be earnings enhancing in its first full year and achieve returns above IHG’s cost of capital by year three, the company says.
Richard Solomons, CEO of IHG, said: “Kimpton is a well-established and highly successful business that has built an industry leading position in the US. It has created a portfolio of world-class hotels and destination restaurants, and the distinctive and innovative Kimpton brand will fit perfectly into the IHG brand family. Adding Kimpton to our portfolio of preferred brands creates the world’s largest boutique hotel business.
The acquisition is another step in IHG’s well-established asset-light strategy of investing in high-quality growth, building on a strong track record of developing iconic global brands. We will use our scale, network of owner relationships, and powerful digital platforms to accelerate Kimpton’s growth both within the US and internationally. The hugely talented Kimpton team will continue to be led by Mike DeFrino, currently Kimpton’s COO, and I am delighted to welcome all of Kimpton’s associates and owners to the IHG family. The culture and values of both companies are well aligned and Kimpton will bring a wealth of expertise and specialist skills to IHG,” he added.
Mike Depatie, CEO of Kimpton Hotels & Restaurants, said: “Kimpton is a unique business with a strong track record of excellence in everything from design and innovative hotel concepts to financial and operational performance. It also has enormous potential for growth, both in its home market of the US and globally. IHG is the ideal partner for Kimpton and has absolutely the right experience and specialist capabilities to help the business move to the next phase of rapid growth. Kimpton and IHG have many things in common, not least our shared values and approach to building brands. As an owner of a significant number of Kimpton hotels through our real estate investment funds, I am committed to developing additional Kimpton hotels and I look forward to seeing Kimpton go from strength to strength as part of IHG.”
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www.kimpton.com
Editor’s Comment
This is something of a coup for IHG, acquiring a ready-made brand with a devoted following and a great reputation. I suspect a proportion of Kimpton’s 1.6 million loyalty programme members will have mixed feelings about the company being taken over by a hotel giant, but if IHG gives new boss Mike DeFrino sufficient autonomy to play to the brand’s strengths, the fall-out should be minimal. The deal also raises the intriguing prospect of Kimpton venturing outside the US, perhaps in to Europe and Asia?
