IHG signs MDA for 15 new Holiday Inn Express hotels in Russia
Holiday Inn Express enters Russia for the first time
IHG (InterContinental Hotels Group), one of the world’s leading global hotel companies, has signed a franchise multiple development agreement (MDA) with Regional Hotel Chain, a portfolio company of VIY Management (VIYM) to develop 15 new hotels in Russia by 2019, which, when open, will double the size of IHG’s estate there as it stands today, and will introduce the Holiday Inn Express brand to the region for the first time.
The 15 new Holiday Inn Express hotels will add approximately 2,250 rooms, when signed, to IHG’s current Russia development pipeline of over 1,700 rooms (5 hotels).
The locations for the first two of these hotels are Chelyabinsk and Voronezh. Holiday Inn Express Voronezh - Kirova is due to open in the second half of 2014 and Holiday Inn Express Chelyabinsk - Central Station, is scheduled to open in summer 2015.
IHG’s chief executive officer, Europe, Angela Brav said: “This is a breakthrough for IHG in Russia. It marks the debut of the Holiday Inn Express brand there and, when the hotels open we will have doubled the size of our system as it stands in Russia today, making a significant step towards our ambition to be market leaders.”
IHG’s chief development officer, Europe, Robert Shepherd said: “Russia is a priority market for IHG in Europe. It is underdeveloped in terms of branded hotel rooms, one of the most prosperous economies in Europe and is a growing market for business travel both internationally and between its many large cities. As Russia grows in economic importance, the introduction of the Holiday Inn Express brand will not only be important to meet local mid-scale demand in-country, where we know there is a significant supply gap, but also as part of a future strategy to capture inbound demand as a brand of choice. We’re pleased to partner with VIYM, one of the most recognised hotel investment managers in the industry in Russia, and look forward to working with them as we expand. ”
VIYM’s Co-founding Partner and Chairman of RHC Board, Andrey Yakunin remarked: “We are pleased to announce our second joint initiative with IHG on the Russian market and promote such a large-scale opportunity on its regional level. Our strong belief is in the high growth potential of the lower midmarket offering supported by international expertise, resource and efficiency, which can be embodied by the introduction of the Holiday Inn Express brand for business and leisure travellers across the country. The current operational results of RHC hotels and the demand, which we see in the regions, only prove our expectations.”
The Holiday Inn Express brand is designed to be the smart choice for value-conscious business and leisure travellers. Fresh, clean and uncomplicated, Holiday Inn Express is a great hotel choice for guests on the go. It offers guests exactly what they need - a great night’s sleep in a high quality hotel and a free breakfast. There are currently more than 2,000 Holiday Inn Express hotels around the globe.
IHG has made no secret of its commitment to growth in Russia, and has previously announced plans to have 100 hotels across Russia and the remainder of the CIS open and in the pipeline by 2020. The company said it would work with local investors to introduce managed and franchised hotels across the country, where there is a need for internationally branded hotels. Its expansion will be driven by growth in regional centres and new fast-growing cities with well-established business communities and tourist attractions.
IHG has 13 hotels (3,894 rooms) open in Russia, with another 5 hotels (1,773 rooms) in the pipeline that will open in the next 3 to 5 years.
Notes to Editors:
Regional Hotel Chain (RHC) is a fast and massive roll-out project for the largest midmarket hotel chain of 26 properties across Russia’s most vibrant regional centers, from Kaliningrad to Vladivostok, to be operated under the global brands (Park Inn by Radisson, Holiday Inn Express, Courtyard by Marriot). With debt financing from Sberbank, there are 4 hotels in operation (Moscow, Kazan, Astrakhan, Izhevsk), 5 hotels under construction (Yaroslavl, Sochi, Novosibirsk, Volgograd, Nizhny Novgorod), 4 hotels at design stage and 13 - in the pipeline. In 2011-2012 RHC won 2 prestigious international RE awards (FIABCI-Russia and CRE Commercial Real Estate Awards).
RHC is one of the project companies of VIY Management (VIYM), an independent UK-based investment manager with a diversified investment platform and exclusive expertise in private equity and real estate in the Greater Europe area, with a specific focus on the emerging markets of the FSU economies. To date VIYM operates from London, Moscow and St. Petersburg with some US$400+ million in AUM and a ca. US$ 1 billion programme. VIYM LPs are primarily HNWIs and family offices of the Continental Europe, the UK and Russia, who seek exposure to the balanced risk / return profile between the established European markets and fast-growing emerging opportunities of CIS economies as well as diversification across private equity high-growth capital strategy in consumer-driven industries, materials and industrials as balanced by secure, low-risk hospitality real estate investments with mixed-use component to provide stable returns and value added upside potential.
VIYM’s hospitality real estate experience includes bringing the globally leading brands of international hotel operators to Russia such as IHG, the Rezidor Group and the Four Seasons Hotels & Resorts. VIYM is active across all the segments from luxury to budget including the first Four Seasons hotel in Russia, an upscale mixed-use project with Crowne Plaza hotel and the Regional Hotel Chain.
Notes to Editors:
IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with nine hotel brands including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, EVEN™ Hotels and HUALUXE™ Hotels & Resorts. IHG also manages Priority Club® Rewards, the world’s first and largest hotel loyalty programme with over 71 million members worldwide.
IHG franchises, leases, manages or owns over 4,600 hotels and more than 675,000 guest rooms in nearly 100 countries and territories. With more than 1,000 hotels in its development pipeline, IHG expects to recruit around 90,000 people into additional roles across its estate over the next few years.
InterContinental Hotels Group PLC is the Group’s holding company and is incorporated in Great Britain and registered in England and Wales.
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