InterContinental Hotels Group, the world’s largest hotel company by room count, expects to expand in the Americas and Asia over the next three years — mostly through new construction — as it divests hotels in Europe.
“We operate in three regions and they are now becoming one congruent system,” said CE Andy Cosslett.
London-based InterContinental, following the lead of other major hotel chains, is largely getting out of the business of owning hotels and is instead signing hotel owners to management contracts and franchise agreements under which it receives a stream of revenue.
The company, which operates its mainstay chain Holiday Inn, as well as upscale brands such as Crowne Plaza and InterContinental, said earlier this month that over the next three years it planned to sell hotels with a net book value of £600m, mostly in Europe.
“The European market has not had a sustained period of growth for some time,” said Cosslett.
The company owns most of the hotels in its European portfolio. “I would be very disappointed if, at the end of next year, we still own most of those properties,” he said.
At the same time, InterContinental, which operates hotels with 538000 rooms, plans to add a net 50000 to 60000 rooms under management contracts or franchise agreements by the end of 2008.
The company had 89000 rooms in its development pipeline, 68000 of which were in the Americas, said Cosslett. Most of those were Holiday Inns, of which about 80% would come from newly built hotels.
In China, InterContinental expected to operate 125 hotels by 2008, up from its current portfolio of 45, said Cosslett.
“Asia is our fastest-growing region,” he said, noting that as visa restrictions ease, international travel by the Chinese was expected to rise exponentially over the next 10 to 15 years.