Exclusive: IHG on its acquisition of Kimpton

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In December, Intercontinental Hotels Group (IHG) purchased US boutique brand, Kimpton Hotels & Restaurants in a multi-million pound deal.

The operator, which currently manages 62 hotels in cities and resorts across America, as well as 71 hotel-based restaurants and bars, was bought for $430m in cash (approx £275m) and now aims to position IHG as a “clear market leader” in the world of boutique hotels.

The move will complement the brand’s Hotel Indigo and Even Hotels names, and is the latest in a line of hotel chains that have realised the potential and appeal of boutique hotels, and want a piece of the action.

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With the addition of the Kimpton portfolio, IHG says it will have 200 open and pipeline boutique and lifestyle hotels across 19 countries. Setting out the reasons for the acquisition, IHG said it saw “significant opportunity to expand the brand in Europe and Asia where there is strong demand for boutique brands”.

With a view to continue to grow this already-impressive legacy, we managed to get some comments from an IHG spokesperson on how the acquisition will affect the brand overall.

How do you hope this new acquisition will position the brand now?
Once the transaction completes, Kimpton will be run as a standalone business. It will therefore be business as usual for the brand. That said, we think that the Kimpton brand has enormous potential for growth, both in its home market of the US and globally.

What appealed to IHG about the Kimpton brand?
Kimpton is a well-established and highly successful business. It has a portfolio of 62 world-class hotels in some of the most attractive US cities and resorts. The brand itself is highly complementary to our existing Hotel Indigo and EVEN Hotels brands and by agreeing to acquire Kimpton, we have created a leading boutique and lifestyle hotel business for IHG.

Furthermore, Kimpton is a fully asset-light business, making the acquisition bang in line with our existing strategy. The culture and values of both companies are well aligned and Kimpton can also bring a wealth of expertise and specialist skills to IHG, such as in F&B and the huge amount of expertise it has developed from running over 70 destination restaurants, bars and lounges.

Was the boutique sector a market you specifically wanted to target?
The boutique hotel segment has been the fastest growing in the hospitality industry over the last four years, with demand, supply, and RevPAR growth for boutique hotels in the US each significantly outperforming the overall industry. The acquisition makes us the clear market leader in the boutique segment.

How do you intend to grow the Kimpton brand within IHG?
We intend to use our scale, network of owner relationships, and powerful digital platforms to accelerate Kimpton’s growth both within the US and internationally. Whilst it is too early to give detail on what the international element of that will look like, we do see enormous potential for the brand in Europe and Asia in particular, where there is strong demand for boutique brands.

With your plans to have ‘200 open and pipeline boutique and lifestyle hotels across 19 countries’, how will you go about reaching this?
Adding Kimpton to IHG’s brand portfolio alongside our Hotel Indigo and EVEN Hotels brands will create a leading boutique and lifestyle hotel business, with over 200 open and pipeline hotels across 19 countries.

Fast facts
• In 1981, founder Bill Kimpton opens company’s first boutique hotel in San Francisco.
• Kimpton Hotels & Resorts is now the world’s largest independent operator of boutique hotels.
• 62 hotels; over 11,000 rooms in 28 key cities across the U.S.
• 16 hotels; nearly 3,000 rooms in the pipeline
• 71 destination restaurants, bars and lounges
• Approximately 1.6m Kimpton Karma Rewards loyalty
• programme members
• Headquartered in San Francisco, California, U.S
• In 2013, USA Today ranked 3 Kimpton bars in its top 10 hotel bars in
the U.S

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