World's largest hotels group expands boutique offering as IHG pays £275m for US-based Kimpton chain

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Intercontinental Hotels has made its first acquisition in 10 years, beefing up its presence in the boutique sector with the £268million purchase of Kimpton Hotels.

Shares in the world’s biggest hotelier, which owns Holiday Inn, rose 44p to 2461p as it added the 62 hotels managed by San Francisco based Kimpton to its existing Indigo and Even brands.

The cash deal will create the world’s biggest collection of boutique hotels, the fastest growing and most lucrative segments of the hospitality industry.

InterContinental already operates the Hotel Indigo chain and the deal to buy the 62 properties, US-based Kimpton expands the group’s boutique hotels that are either open or planned to around 200

Kimpton was established in 1981 and is the largest independent boutique hotel and restaurant business in the US.

IHG has been throwing off cash following a spate of recent disposals. It has been busy selling off the last remaining freehold properties of landmark buildings in New York, London and Paris.

The hotel giant, also owner of the Crowne Plaza chain, has refocused its business towards managing rather than owning properties around the world. 

Flush with the cash, it went on the acquisition trail to accelerate its presence in boutique hotels following years of creating its own new brands.

It recently launched Hualuxe in China, to cater for the domestic market, and Staybridge Suites, that come complete with kitchens, for business travellers on extended trips.

Chief executive Richard Solomons, said: ‘Kimpton is a well-established and highly successful business. It has created a portfolio of world-class hotels and destination restaurants, and the distinctive and innovative Kimpton brand will fit perfectly.’

Vicki Stern, an analyst at Barclays, said: ‘IHG has identified significant opportunities to accelerate growth of Kimpton in US and to launch it globally. This is the first acquisition by IHG in over 10 years.

‘While the initial multiple appears very high, if the group can deliver on the doubling of operating profit then the price being paid is reasonable and this will offer IHG a platform to accelerate.’