InterContinental Hotels Group (IHG) is to build 19 Holiday Inn Express hotels in India over the next five years. To do so, it is investing US$30 million to acquire a 24% stake in a joint venture with Duet India Hotels Group. IHG’s investment in the joint venture will be paid over three years.
The hotel developments, which will be located in Delhi, Mumbai and Bangalore, are expected to be completed by 2016, with the first hotel opening planned for the middle of 2012.
Anuj Gupta, the managing partner and CEO of Duet, said: “mid-market hotels are the core focus of our hotel business in India … [This market sector] offers a compelling investment proposition given favourable demand-supply dynamics and an attractive build cost to operating returns equation.”
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IHG aims to have 150 hotels operating across India by 2020. In addition to India, the group has signed deals to establish Holiday Inn Express Singapore and Thailand.
The company’s chief financial officer, Richard Solomons, said: “By investing a small amount of our own capital we have established a strategic relationship with a fantastic partner who knows the market … With strong economic growth and an expanding middle class in India, we forecast strong future demand for mid-market and select service hotels.”
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