IHG plans Middle East expansion

InterContinental Hotels Group (IHG) aims to open 50 per cent more hotels over next four years

InterContinental Hotels Group (IHG), the biggest hotel chain in the world, is aiming to increase the number of its hotels in the region by 50 per cent within the next four years, although some of its projects have suffered delays.

The company, based in the UK, with brands including Crowne Plaza and Holiday Inn, has 76 hotels operating in the Middle East and a further 37 under development.

"There's a lot going on," said Karin Sheppard, the vice president commercial for IHG in the Middle East and Africa. "Here in the UAE, which is a strong market for us, we currently have 16 hotels and another six in the pipeline."

IHG this month took over the management of the former Marriott Renaissance hotel in Deira, Dubai. As part of the change, the property is to undergo a US$55 million (Dh202m) refurbishment. In Dubai, IHG has Crowne Plaza hotels under development in Business Bay and in the International Media Production Zone.

"The market has had a slowdown and projects have slowed down compared to first projections," said Ms Sheppard.

In Abu Dhabi, an InterContinental hotel is planned for Al Raha Beach, but it is not expected to open until 2015.

Hotel companies worldwide have experienced delays to their projects as developers suffered setbacks as finance dried up. Hotel occupancy was also hit by a downturn in global travel.

Last year, IHG revenue per available room, an important industry indicator, grew by 6.1 per cent in Europe, the Middle East and Africa as a whole. But in the Middle East alone, there was a 1 per cent drop.

"Egypt is an important market for us," said Ms Sheppard. IHG has hotels in Cairo and in resort locations including Port Ghalib. "For us, what's important is to look at as the market stabilises again how we can drive recovery back into the market. Egypt, just like many markets here, bounces back." Within the GCC, Saudi Arabia is a particular focus for IHG. The company plans to launch its budget Holiday Inn Express brand there within the next couple of years.

"That could become a popular choice for emerging travellers," says Ms Sheppard.

Ishraq Gulf Real Estate, which is majority-owned by Dubai International Capital, also has a franchise arrangement with IHG, as the exclusive developer of the brand in the GCC.

Sami al Ansari, the chief executive of the company, last year told The National that plans to build 20 Holiday Inn Express budget hotels in the Gulf for up to Dh3 billion have been pushed back. So far the brand has opened properties only in Dubai, although there are plans to open another in Bahrain this year.

Ms Sheppard said demand for such brands was only likely to grow. "The emergence that you are seeing here in terms of the low-cost carriers is creating another dynamic for mid-market travellers, encouraging people to travel more."