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InterContinental Hotels Group targets wealthy customers with £233m acquisition

Joanna Bourke

Holiday Inn-owner InterContinental Hotels Group’s efforts to attract more affluent customers were boosted on Wednesday as it agreed a $300 million (£232.6 million) purchase of a luxury resorts operator.

FTSE 100 firm IHG said it has inked a deal to buy Bangkok-headquartered Six Senses Hotels Resorts Spas from US investment group Pegasus Capital Advisors.

The transaction includes brands and operating companies behind 16 upmarket hotels. IHG will now run sites such as the Six Senses Laamu in the Maldives, where double rooms start at £953.29 a night. Other locations include Yao Noi in Thailand, Zighy Bay in Oman and Portugal’s Douro Valley.

IHG’s Keith Barr, who became chief executive in 2017, said Six Senses “is an outstanding brand in the top tier of luxury and one we’ve admired for some time”.

The deal brings the number of IHG’s luxury hotels, either already open or in the pipeline, to 400 worldwide.

The swoop comes one year after Barr unveiled his growth strategy for IHG, which included expanding its luxury division. He said at the time he wanted to invest more to boost growth.

Barr made his first luxury purchase last year, buying a 51% stake in upmarket brand Regent Hotels and Resorts for for $39 million.

Shares in IHG, which has faced competition from online rental accommodation companies such as Airbnb, rose last summer before falling in the final quarter of last year. Today the City welcomed the Six Senses deal and the shares gained 35p to 4493.5p.

Morgan Stanley analyst Jamie Rollo pointed out that Six Senses is currently loss-making and not expected to make a profit for another two years. His note today called the deal “sensible but expensive”.

Geoffrey d’Halluin at Bank of America Merrill Lynch said: “We believe that this deal is strategically sensible for IHG.”