LoyaltyLobby
  • News
  • Hotel Promos
    • Accor
    • Best Western
    • Radisson Rewards
    • Choice
    • Fairmont
    • Hilton
    • World of Hyatt
    • IHG Rewards
    • Marriott
    • Ritz-Carlton
    • Starwood
    • Wyndham Rewards
  • Reviews
  • Contact Us
  • Blog View
  •  
LoyaltyLobby
  • News
  • Hotel Promos
    • Accor
    • Best Western
    • Radisson Rewards
    • Choice
    • Fairmont
    • Hilton
    • World of Hyatt
    • IHG Rewards
    • Marriott
    • Ritz-Carlton
    • Starwood
    • Wyndham Rewards
  • Reviews
  • Contact Us
  • Blog View
  •  
LoyaltyLobby
No Result
View All Result
ADVERTISEMENT

InterContinental Hotels Group Acquires Kimpton Hotels & Restaurants

by John Ollila
December 15, 2014
Reading Time: 5 mins read
4

InterContinental Hotels Group today has agreed to purchase San Francisco based Kimpton Hotels & Restaurants that operates 62 boutique hotels and has 16 properties in the pipeline, for $430 million.

InterContinental Hotels Group Kimpton Hotels & Restaurants

InterContinental Hotels Group has IHG Rewards Club and Ambassador guest loyalty programs and Kimpton recently relaunched its Karma loyalty program.

You can access IHG’s announcement of this purchase here.

ADVERTISEMENT

Kimpton Karma members took it to Facebook to voice their displeasure of this development:

InterContinental Hotels Group Kimpton Hotels & Restaurants FM

Here’s the announcement from IHG:

Highlights:

– IHG has agreed to acquire Kimpton Hotels & Restaurants (“Kimpton”) for $430 million in cash.

– Kimpton is the world’s largest independent boutique hotel operator and a sophisticated food and beverage operator.

– Kimpton is a fully asset-light business that manages 62 hotels in the most attractive cities and resorts in the US with a further 16 hotels in the pipeline. It operates 71 hotel-based destination restaurants and bars.

– Acquisition makes IHG the clear market leader in the boutique segment, the fastest growing segment in the industry.

– Highly complementary with IHG’s Hotel Indigo and EVEN Hotels brands; creates a leading boutique and lifestyle hotel business, with over 200 open and pipeline hotels across 19 countries.

– Significant opportunities identified for IHG to accelerate the growth of the Kimpton brand within the US and to launch it globally.

– Compelling financial rationale with Kimpton EBITDA expected to double by the end of 2017.

– The transaction will be earnings enhancing in its first full year and achieve returns above IHG’s cost of capital by year three.

Richard Solomons, Chief Executive Officer of IHG, commented: 

“Kimpton is a well-established and highly successful business that has built an industry leading position in the US.  It has created a portfolio of world-class hotels and destination restaurants, and the distinctive and innovative Kimpton brand will fit perfectly into the IHG brand family.  Adding Kimpton to our portfolio of preferred brands creates the world’s largest boutique hotel business.

The acquisition is another step in IHG’s well-established asset-light strategy of investing in high-quality growth, building on a strong track record of developing iconic global brands.  We will use our scale, network of owner relationships, and powerful digital platforms to accelerate Kimpton’s growth both within the US and internationally.

The hugely talented Kimpton team will continue to be led by Mike DeFrino, currently Kimpton’s COO, and I am delighted to welcome all of Kimpton’s associates and owners to the IHG family. The culture and values of both companies are well aligned and Kimpton will bring a wealth of expertise and specialist skills to IHG.”

Mike Depatie, Chief Executive Officer of Kimpton Hotels & Restaurants, commented:

“Kimpton is a unique business with a strong track record of excellence in everything from design and innovative hotel concepts to financial and operational performance.  It also has enormous potential for growth, both in its home market of the US and globally.  IHG is the ideal partner for Kimpton and has absolutely the right experience and specialist capabilities to help the business move to the next phase of rapid growth.  Kimpton and IHG have many things in common, not least our shared values and approach to building brands.  As an owner of a significant number of Kimpton hotels through our real estate investment funds, I am committed to developing additional Kimpton hotels and I look forward to seeing Kimpton go from strength to strength as part of IHG.”

16 December 2014, London: InterContinental Hotels Group PLC (“IHG”) [LON:IHG, NYSE:IHG (ADRs)] today announces that it has agreed to acquire Kimpton Hotels & Restaurants Group LLC for cash consideration of $430 million (the “Transaction”).

Kimpton Overview

Kimpton was established in 1981, and is the largest independent boutique hotel and restaurant business in the US.  It manages 62 hotels (11.3k rooms) across 28 cities in the US in attractive urban and resort locations such as Boston, Chicago, Florida, Los Angeles, New York, San Francisco, Seattle and Washington D.C.  There are a further 16 hotels in the development pipeline (3.0k rooms), of which 10 are under construction.  Kimpton also operates 71 hotel-based destination restaurants, bars and lounges across the US.

Kimpton caters for a broad and varied range of guest needs, including ‘Mixing Business with Pleasure’, ‘Short Break Experience’, ‘Romantic Getaway’ and ‘Wellbeing’ at an upper upscale price point.  It also has a well-established and sophisticated member loyalty programme, Kimpton Karma Rewards, which has approximately 1.6 million members.

Kimpton and its hotels and restaurants have secured a wealth of industry awards and accolades including:

– Fortune Magazine’s “100 Best Company to Work For” in five of the last six years.

– Named the number one company for Guest Satisfaction for North American Upper Upscale Hotel Brands in 2013 and 2014 by J.D. Power.

– Recognised by the Market Metrix Hospitality Index as the best performing company in “Overall Customer Satisfaction in Upper Upscale Category” for the World for 2013.

– “Best Hotel Bars” by Food & Wine in 2014 and 2013, TripAdvisor’s “Certificate of Excellence” in 2013, and “Best Hotel Bar” USA Today’s 10 Best Reader’s Choice Award in 2013.

Significant Opportunity to Accelerate Growth

Adding Kimpton to IHG’s portfolio of preferred brands, alongside its highly successful Hotel Indigo and EVEN Hotels brands, will create a leading boutique and lifestyle hotel business, with over 200 open and pipeline hotels across 19 countries.

The boutique hotel segment has been the fastest growing in the hospitality industry over the last four years, with demand, supply, and RevPAR growth for boutique hotels in the US each significantly outperforming the overall industry.

IHG will capitalise on its scale, powerful global owner networks, digital platforms, and specialist capabilities of building preferred brands to enhance Kimpton’s growth globally.  In particular, there is a significant opportunity to expand the brand in Europe and Asia where there is strong demand for boutique brands.  IHG will also benefit from Kimpton’s strong track record in operational excellence, food & beverage and design, to add value across its current brand portfolio.

The Kimpton Real Estate Investment Funds, which are run by four existing Kimpton executives, expect to make future investments in Kimpton branded hotels.  The Funds own approximately 30% of Kimpton’s existing and pipeline properties and intend to raise additional funds to acquire, develop and redevelop boutique hotels.  As part of this investment platform, the Funds expect to have a meaningful and on-going relationship with the Kimpton brand.

Financial Performance

Kimpton has a strong track record of operational and financial performance, achieving 4.0% per annum growth in system size and 7.7% average growth in comparable same store RevPAR in the last five years.  Kimpton’s EBITDA is expected to be approximately $20 million for the year ended 31 December 2014, and IHG expects to be able to deliver future growth in Kimpton EBITDA to approximately $39 million by 2017 from the opening of hotels in the pipeline and the achievement of certain back office and technology savings.

Transaction Overview

The Transaction will be financed through existing cash resources and new debt facilities, and is expected to close during the first quarter of 2015 upon satisfaction of certain customary conditions, including Hart-Scott-Rodino anti-trust clearance and Kimpton shareholder consent.

For US tax purposes, the transaction constitutes an asset sale for both the vendor and purchaser, and IHG is entitled to amortise the assets acquired.  It is anticipated that the relief associated with this amortisation will reduce future taxes by approximately $160m.

Conclusion

Certainly it wasn’t a secret that Kimpton was looking for a buyer, but I certainly didn’t see the IHG as the main contender. Wouldn’t have SPG been a better fit?

It will be business as usual for Kimpton’s Karma members for a while for sure, but there must be some kind of program integration coming at a later point.

It doesn’t make any sense for IHG to have three separate guest loyalty programs (Ambassador, IHG Rewards Club & Karma) for various brands. Even keeping the Karma as the guest recognition program (ala Ambassador for InterContinental hotels) while earning IHG Rewards Club points, would be confusing for many.

In the short term, they could offer something similar that Hyatt has going on with MGM and SPG with Caesars. You would get matched status in each others programs and earn points/free nights in one of them.

This is definitely an interesting development. Let’s hope that the Kimpton’s integration to InterContinental Hotels Group works out well for both Karma and IHG Rewards Club members.

Previous Post

Accor & Huazhu Hotels China Partnership

Next Post

American Airlines & US Airways Share Miles 30% Discount December 15 – 30, 2014 (Makes ZERO Sense)

Related Articles

IHG Asia-Pacific 15% Off Visa Partner Offer Through July 3, 2023

IHG Asia-Pacific 15% Off Visa Partner Offer Through July 3, 2023

John Ollila
February 7, 2023

IHG has extended the Visa partner offer by six months, which helps eligible cardholders to save on stays in Asia-Paciifc....

IHG Save Up To 25% On New Hotels In The Middle East, India & Africa

IHG Save Up To 25% On New Hotels In The Middle East, India & Africa

John Ollila
February 4, 2023
1

IHG has started to promote new hotels that have recently opened in the Middle East, India, and Africa. IHG One...

IHG One Rewards Gold & Platinum Fast Track 2023 (Sign Up By April 30)

IHG One Rewards Gold & Platinum Fast Track 2023 (Sign Up By April 30)

John Ollila
January 31, 2023
24

IHG has launched a new Gold and Platinum fast-track offer, valid for sign-ups through April 30, 2023. IHG One Rewards...

Upgrade Your Travel IQ

Make the most of your travel with our free and daily newsletter with the latest hotel and airline news and promotions.

We do not sell or share email addresses.

ADVERTISEMENT

Trending

Marriott Hotels To Avoid If Complimentary Breakfast Is Important
Marriott Bonvoy

Marriott Hotels To Avoid If Complimentary Breakfast Is Important

February 6, 2023
Singapore Airlines Spontaneous Escapes June 1 – 30, 2022 (Book By May 31)
Singapore Airlines

Singapore Airlines Claims Name Mismatch On Points To KrisFlyer Conversion?

February 6, 2023
Hilton Go Employee And Friends & Family Rate Plans
Hilton Honors

Hilton Go Employee And Friends & Family Rate Plans

July 25, 2021
Top Hotel Promotions September 2022
Hilton Honors

Hilton Honors Bonus Points & Rate Promo Update February 2023

February 6, 2023
Alaska Airlines & Qatar Airways Frequent Flier Partnership Launch December 15, 2020
Qatar Airways - Privilege Club

Reader Question: Where To Credit Qatar Airways Business Class Flights?

February 6, 2023

Top Categories

  • IHG Rewards Club
  • Marriott Bonvoy
  • Hilton Honors
  • Accor ALL
  • Airfare Of The Day
  • Starwood Preferred Guest (SPG)
  • Hyatt – World of Hyatt
  • Travel News
  • American Airlines – AAdvantage
  • British Airways
ADVERTISEMENT

All Categories

In Case You Missed It

Accor ALL Europe 30% Off Spring Sale For Stays March 3 – April 30, 2023 (Book By February 23)

Accor ALL Europe 30% Off Spring Sale For Stays March 3 – April 30, 2023 (Book By February 23)

February 6, 2023
Best Western 5,000 Bonus Points Per Stay In North America Through May 7, 2023 (Book By February 5)

Best Western 5,000 Bonus Points Per Stay In North America Through May 7, 2023 (Book By February 5)

January 31, 2023
Airfare of the Day -Business Class- ITA New York to Cairo from $2,464

Airfare of the Day -Business Class- ITA New York to Cairo from $2,464

February 1, 2023
Air France-KLM January Promo Awards For Travel Through June 30, 2023

Air France-KLM January Promo Awards For Travel Through June 30, 2023

January 31, 2023
Singapore Airlines Spontaneous Escapes June 1 – 30, 2022 (Book By May 31)

Singapore Airlines Claims Name Mismatch On Points To KrisFlyer Conversion?

February 6, 2023
ADVERTISEMENT

Since 2011, we have been helping millions of visitors like you untangle travel loyalty programs for free upgrades, flights and hotel nights.

Facebook Twitter Youtube Instagram

Site Navigation

  • About LoyaltyLobby
  • News
  • Reviews
  • Airfares
  • Contact Us

Hotel Promotions

  • Accor
  • Hilton
  • IHG Rewards
  • Marriott
  • World of Hyatt

Sign Up For Our Newsletter

Our free daily newsletter sends you the latest information on hotel and airline programs.

We do not share or sell email addresses.

Site & Contents ©2011-2023 LoyaltyLobby.com
Terms of Use & Privacy Policy

  • News
  • Hotel Promotions
    • Accor
    • Best Western
    • Choice
    • Fairmont
    • Hilton
    • IHG Rewards
    • Marriott
    • Radisson Rewards
    • Ritz-Carlton
    • Starwood
    • World of Hyatt
    • Wyndham Rewards
  • Reviews
  • Contact Us
  • Blog View
No Result
View All Result

© 2011–2023 LoyaltyLobby.com - Site & Contents