Hints and tips:
...They aim to woo other owners to convert their existing hotels to Sonestas through a new franchising arm, unveiled last September. “The large brands have no skin in the game. They don’t own hotels....
...The exercise will look at the value of each individual part of the sprawling business, including its traditional office leasing arm, a growing franchising operation and the proprietary technology developed...
...Both Hilton and IHG focus on asset-light franchising. But IHG’s Holiday Inns target budget travellers, handy in a downturn....
...Alphaville was recently flipping through the Paycheck Protection Program (PPP) data dump from the US Treasury and came across loans for two entities called Delight Holdco I LLC and Delight Holdco II LLC....
...Inspiration is provided by hotel groups like IHG. By offloading properties, thinks Mr Dixon, it can grow without deploying much capital....
...But the question we raised is does franchising success ultimately rely on two of America’s most acute pathologies: excessive leverage and exploiting cheap labour?...
...But Mr Dixon said franchising deals were now its focus. “It’s no different to McDonald’s . . ....
...It took IHG four or five hotel sales before it earned a re-rating. Mr Dixon may have a few more early starts, yet....
...We upgrade Whitbread to Buy (from Hold) as business confidence improves, remain Buyers of Accor and stay Hold on IHG....
...In IHG’s full-year results, trading showed varying levels of growth affected by regional trends....
...IHG’s Avid Hotels, also launched in the US last year, is another business offering smaller, cheaper rooms....
...The strategy, which followed a number of its peers in the aftermath of the financial crisis, led to a disposing of properties to concentrate on management and franchising — a model that makes it easier for...
...Hoteliers in Paris have been suffering since the terror attacks in November last year and IHG’s latest results show trading in the key tourism city continues to be challenging, although IHG said the sharp...
...IHG now runs an asset-light model, operating hotels for the property owner or franchising its brands. The company’s main cost is staff, which is highly flexible....
...The company has followed a number of its peers by disposing of properties to concentrate on management and franchising, a model which makes it easier for companies to expand....
...The agreed purchase price reflects a 29 per cent premium to the hotel’s book value of $342m in IHG’s latest accounts....
...Management has returned $10bn to shareholders over the past decade, including a $750m special dividend in May, and has a clear strategy: sell the hotels the group owns, and focus on franchising brands, such...
...IHG focuses on managing and franchising hotels rather than owning them, keeping assets low and returns high. It has sold as much real estate as it could during the past decade....
...private equity firm and Accor shareholder, had been pressing the group to go faster in its embrace of an asset-lite model, in which hoteliers sell off properties and concentrate on their management and franchising...
...IHG, considered the industry leader in the asset-light strategy, has seen its share price increase 131.6 per cent in the last five years....
...IHG will retain the contract to manage the 447-room hotel – which has been open since 1975 – for 30-60 years....
...Seeing IHG return such amounts to shareholders, Colony would wonder why Accor did not do the same, he added....
...However, while welcoming the asset-light plan, many analysts doubt whether Accor can generate the same returns as IHG. Tim Barrett, analyst at Nomura, says: “Comparison with IHG is flawed....
...The company acknowledges that if its new investments are not getting results within a year to 18 months, it will look to joint ventures, re-franchising of bottlers or even disposals....
...IHG, whose business is predominantly based on managing or franchising independently owned hotels around the world rather than directly owning them, saw demand at its upmarket Intercontinental and Crowne...
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