Dive Brief:
- IHG Hotels & Resorts acquired the Germany-based lifestyle hotel brand Ruby for approximately $116 million, the company announced as part of its fourth-quarter and full-year 2024 earnings announcement Tuesday.
- Ruby, established in 2013, currently operates 20 hotels in major European cities, with 10 more in the pipeline. In a statement, IHG CEO Elie Maalouf said the company plans to “rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions.”
- The acquisition reflects IHG’s broader strategy to build its presence “in large, attractive industry segments,” Maalouf said. Part of that strategy has been a rapid expansion of IHG’s luxury and lifestyle hotel portfolio in the U.S.
Dive Insight:
In its earnings report Tuesday, IHG posted year-on-year global RevPAR growth of 3% for full-year 2024 and 4.6% for the fourth quarter. RevPAR for the Americas region rose 2.5% and 4.6% for the full year and fourth quarter, respectively.
In a statement, Maalouf called 2024 “an excellent year of financial performance, strong growth and important progress.”
The company opened 371 hotels globally in 2024 and added 714 to the pipeline, a 34% increase year on year. Development progress led to a global pipeline increase of 10% to more than 2,200 hotels.
In the Americas, specifically, IHG opened 16,832 rooms and signed 26,552 in 2024.
The newly acquired Ruby brand offers a “franchise-friendly model” in the “urban micro space,” according to Maalouf. The company is in the midst of an ambitious expansion of its “franchise-ready” midscale conversion brand, Garner, which now boasts 117 open hotels worldwide, according to the report.
Outside of Garner, the seven other brands IHG has launched or acquired in recent years — Regent, Six Senses, Kimpton, Vignette Collection, Voco, Avid and Atwell Suites — have grown to 5% of total current system size and 17% of the pipeline.
Hotels in the company’s growing luxury and lifestyle segment represent 14% of IHG’s current system size and 21% of its pipeline, according to the report.
IHG expects franchise fees from Ruby’s current portfolio to be approximately $8 million in 2028.
