23rd Oct 2006 07:55
InterContinental Hotels Group PLC23 October 2006 23 October 2006 INTERCONTINENTAL HOTELS GROUP HOTEL JOINT VENTURE WITH ALL NIPPON AIRWAYS InterContinental Hotels Group ("IHG") announces the signing of a hotel operatingjoint venture with All Nippon Airways ("ANA"), to be named IHG ANA Hotels GroupJapan. IHG will invest £8m for a majority stake in the joint venture, whichwill be the largest international hotel operator in Japan, the world's secondlargest hotel market. ANA will sign new 15-year management contracts with IHG ANA Hotels Group Japanfor its 13 owned and leased hotels (4,943 rooms), adding these rooms to IHG'ssystem size on completion of the deal, which is expected in December 2006.These 13 hotels (4,943 rooms) will over time re-brand to one of the threeco-brands created for Japan - ANA-InterContinental, ANA-Crowne Plaza andANA-Holiday Inn. The flagship ANA Hotel Tokyo will be the first to be co-branded in April 2007 asthe ANA-InterContinental Tokyo. The remaining 12 hotels will be co-branded overthe following 18 months. These include three further ANA-InterContinentalhotels and seven ANA-Crowne Plaza hotels, with the remaining two hotelscurrently proposed to be one ANA-Crowne Plaza and one ANA-Holiday Inn. In addition, the joint venture will continue to operate ANA Hotels & Resorts'remaining 18 hotels (4,127 rooms) in Japan under management contracts, franchiseagreements and marketing referral agreements for third party owners, who willalso be offered the opportunity to enjoy the benefits of co-branding. IHG currently operates 11 hotels in Japan (3,100 rooms), which, combined withIHG ANA Hotels Group Japan's 31 hotels, gives a combined estate of 42 hotelswith more than 12,000 rooms. IHG was selected as ANA's partner after a highly competitive process. Thestrength of IHG's family of brands, robust growth pipeline, internationaloutlook and established operating systems made it the preferred partner for ANA,while ANA's reputation for high quality standards and service made it anattractive partner for IHG. To develop positioning and build awareness of the co-brands in Japan, and takeadvantage of its early mover advantage, IHG will invest approximately £10million over the next two years in brand advertising and research, which will becharged to IHG's profit and loss account. IHG will, in addition, lend up to£7million to the joint venture to part fund the implementation of an enhanced ITplatform to drive improved operating performance. After this revenueinvestment, transaction costs and integration costs, the transaction is expectedto be earnings enhancing in its third year of operation. Andrew Cosslett, Chief Executive of IHG, commented: "This deal marks another significant step for IHG as we continue to develop ourbrands throughout Asia. We are delighted to be in partnership with ANA whichhas a reputation for high standards and quality of service. This joint venturewill turn IHG ANA Hotels Group Japan into the country's leading hotel operator. It is consistent with our strategy of expanding our presence in key markets andmakes IHG the first international hotel company with a large scale multi-brandpresence in Japan. We believe that all three co-brands - ANA-InterContinental,ANA-Crowne Plaza and ANA-Holiday Inn - will benefit significantly from thearrangement and collectively have great potential to become the first choice inJapan for our guests, our owners and our people." ANA President and CEO Mineo Yamamoto said: "This is a great day for ANA Hotels and Resorts. Our joint venture withInterContinental Hotels Group, one of the world's most well-known andprestigious hotel companies, will bring our hotel guests the benefits ofenhanced hotel operations under powerful co-brands and will enable our employeesto take advantage of truly global training and personal development programs.In addition, our hotel owners will enjoy the benefits of industry-leading hoteloperating systems and our shareholders will benefit from the value that comesfrom working with a global partner. This is a superb platform from which tostrengthen our hotel business, grow the co-brands and develop our people, inorder to benefit our guests, our shareholders, our employees and our businesspartners in Japan." For further information, please contact: Investor Relations (Paul Edgecliffe-Johnson) +44 (0) 1753 410 176 Media Affairs (Leslie McGibbon) +44 (0) 1753 410 425 Notes Japanese hotel market Japan is the world's second largest economy, with a GDP of US 4 trillion in2005. Japan is also the world's second largest travel and tourism market, worthUS 530 billion annually, and the world's second largest hotel market, with 10%of the world's hotel rooms. Japan is the third largest market for outboundtravel, particularly to the US and UK. The Japanese hotel market is currently dominated by domestic hotels, withapproximately 70,000 traditional inns, with an average of 15 rooms each, and9,000 domestic hotels with 700,000 rooms, mostly owner run. Chain hotelsrepresent only approximately 5% of available rooms, and are dominated bydomestic players. International hotel chains represent only 90 hotels and have anegligible share of the market. Joint venture shareholdings IHG will hold a 75% interest in the joint venture with ANA holding a 25% stake. ANA Hotels and Resort's ("AHR") portfolio in Japan AHR currently manages and franchises 31 hotels (9,070 rooms) in Japan made upof: • 13 hotels (4,943 rooms) owned or leased by ANA• Four managed for third party owners• 11 franchised agreements• Three operated under marketing referral agreements. In addition, AHR operates two hotels in Vienna and Xian under marketing referralagreements. IHG's portfolio in Japan IHG currently manages and franchises 11 hotels (3,100 rooms) in Japan, making itthe fourth largest international hotel operator. • 3 managed hotels• 8 franchised hotels InterContinental Hotels Group PLC of the United Kingdom (LON:IHG, NYSE:IHG(ADRs)) is the world's largest hotel group by number of rooms. InterContinentalHotels Group owns, manages, leases or franchises, through various subsidiaries,over 3,650 hotels and 540,000 guest rooms in nearly 100 countries andterritories around the world. The Group owns a portfolio of well recognised andrespected hotel brands including InterContinental(R) Hotels & Resorts, CrownePlaza(R) Hotels & Resorts, Holiday Inn(R) Hotels and Resorts, Holiday InnExpress(R), Staybridge Suites(R), Candlewood Suites(R) and Hotel Indigo(R), andalso manages the world's largest hotel loyalty programme, Priority Club(R)Rewards with over 28 million members worldwide. InterContinental Hotels Group offers information and online reservations for allits hotel brands at www.ichotelsgroup.com and information for the Priority ClubRewards programme at www.priorityclub.com. For the latest news from InterContinental Hotels Group, visit our online PressOffice at www.ihgplc.com/media All Nippon Airways (ANA) is the seventh largest airline in the world and Japan'slargest domestic carrier. It is listed on the Tokyo Stock Exchange. Carrying almost 50 million passengers every year to 50 destinations in Japan and23 cities throughout Asia, Europe and the United States, ANA is recognized foroutstanding passenger service both on the ground and in the air. In thegreatest Japanese tradition of mixing hospitality with high technology,personalised a la carte service complements state-of-the-art entertainmentsystems and the latest in cabin design. ANA has been in the airline businessfor over 50 years, and combined with ANA Group companies, its activities extendacross a host of complete travel and aviation-related services. As a member of Star Alliance, the world's foremost airline alliance, ANApassengers enjoy access to a network of over 841 airport destinations in 147countries, and reciprocal benefits such as mileage accrual and reception andlounge access. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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