IHG and Iberostar team up to go all-in on all-inclusive

by | 02 Dec 2022 | Portfolio

InterContinental Hotels Group (IHG) and Iberostar Hotels & Resorts have signed a long‑term commercial agreement for resort and all-inclusive hotels.

Up to 70 hotels (24,300 rooms) will be added to IHG’s system over the next two years under the Iberostar Beachfront Resorts moniker, which will become the group’s 18th brand. Of these, 27 properties (8,200 keys) still require additional approvals from third parties in order to join IHG.

Iberostar autonomy

Iberostar is a family-run business based in Palma de Mallorca, Spain, with more than 65 years’ experience in the hospitality industry. Through this strategic alliance, Iberostar will retain 100% ownership of its sites, while the agreement gives IHG a licence to the Iberostar Beachfront Resorts brand.

The strand will be included in a new Exclusive Partners category in IHG’s brand portfolio, which will sit alongside its Suites, Essentials, Premium and Luxury and Lifestyle categories.

Deal in detail

The agreement has an initial term of 30 years and the option to renew for additional terms of 20 years upon mutual consent. The deal will boost IHG’s global system size by up to 3%.

A pipeline of six further Iberostar Beachfront Resorts properties, representing around 3,000 rooms, is also expected to be added to IHG’s pipeline. This includes the 131-key Iberostar Heritage Las Mercedes, heading to Santo Domingo in the Dominican Republic in Q4 2023 and Iberostar Buenos Aires, bringing 99 rooms to Argentina in 2024. The pipeline is expected to increase as IHG and Iberostar work together to grow the brand’s footprint through the long-term commercial agreement.

First additions

The first properties are set to join the group this month in locations including Mexico, the Dominican Republic, Jamaica, Brazil and the Canary Islands (Spain). Further properties in Spain and other popular resort destinations in Southern Europe and North Africa are anticipated to join IHG’s system over the course of 2023 and 2024.

The sites include Iberostar Grand Paraiso (Riviera Maya, Mexico); Iberostar Selection Hacienda Dominicus (Bayahibe, Dominican Republic); Iberostar Grand Rose Hall (Montego Bay, Jamaica); and Iberostar Selection Anthelia (Tenerife, Spain).

Mutual benefits

These add to IHG’s existing 260 resorts spanning brands including Six Senses, Regent, InterContinental, Kimpton, Hotel Indigo, Crowne Plaza, Holiday Inn and Holiday Inn Club Vacations. IHG has fewer than 20 resort properties in the countries where the Iberostar Beachfront Resorts properties are located. The agreement therefore significantly increases and broadens IHG’s resort footprint.

The portfolio of Iberostar properties will gain access to IHG’s enterprise platform, including its distribution channels and the IHG One Rewards. IHG in turn feels the agreement will increase awareness of its current brands with a new set of travellers, and meet a clear desire from guests and loyalty members for more resort destinations and the option of all-inclusive stays.

Increased choice

Keith Barr, IHG’s CEO, said: “As we continue to expand the footprint of our world‑famous brands, we are always looking at exciting, sustainable growth opportunities in areas that can further enhance our offer for guests and owners. Guests have told us of their wish for increased choice of resort and all-inclusive destinations within our brand portfolio. We are delighted to address that by working with such a well-respected, experienced and like-minded partner as Iberostar, and to see more amazing hotels join our system that continues IHG’s growth in so many of the world’s most attractive markets and destinations.

“Iberostar has successfully developed a leading presence in beachfront and all-inclusive properties in the Caribbean, Americas, Southern Europe and North Africa over many decades, and we are excited about the opportunities to further grow the brand’s footprint together. This agreement increases IHG’s system by up to 3%, which helps to deliver on our ambitions for system growth. We continue to explore further opportunities for growth with exclusive partners, demonstrating the strengths and attractiveness of IHG’s enterprise platform.”

Continued growth

Sabina Fluxá, vice-chair and CEO, Iberostar Group, commented: “With this agreement, we set the path to continue the outstanding growth that began 40 years ago with the creation of the Iberostar brand and which has positioned us among the top resort brands in the world. The alliance with IHG combines our strengths, represents a decisive step forward in the distribution of Iberostar’s beachfront resorts, and reinforces our position as a benchmark in responsible tourism. By working together we will grow our portfolio and we are really looking forward to hosting IHG loyalty members in our collection of premium and luxury beachfront resorts and all-inclusive properties.”

Iberostar’s chairman, Miguel Fluxá, added: “This strategic alliance will enable Iberostar Beachfront Resorts to benefit from IHG’s industry-leading technology, deep skills and global scale. Retaining 100% ownership of Iberostar allows us to continue to generate differentiation in the hospitality industry with a long-term vision for our employees, clients, tour operators, distribution partners and local communities that have been loyal to us during all these years. We will continue to stay true to who we are, preserving our philosophies and values of quality and sustainability.”

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