IHG halts all Russian developments

by | 11 Jul 2022 | Portfolio

IHG Hotels & Resorts is pulling out of Russia following its invasion of Ukraine, putting a stop to at least five prospective constructions.

The major hotel group confirmed it is completely withdrawing from the country, having paused its operations when the war began.

Cancelled quintet

According to the TOPHOTELPROJECTS database, this move will mean that at least five upcoming hotel constructions will now be cancelled.

This includes two four star Holiday Inn-branded hotels in St Petersburg, one on Kremenchugskaya Street and the other as part of the Neva Sky complex. However, both 400-room projects were already on hold.

Two further prospective four star Moscow hotels were due to join the portfolio too: Crowne Plaza Moscow — Park Huaming and Hotel Indigo Moscow – Tverskaya. While the 100-room Hotel Indigo development was also on hold, the 340-key Crowne Plaza was already under construction and due for completion in Q3 this year.

A five-star, 120-room Holiday Inn Express was also in the pre-planning stage in the Siberian city of Tyumen, though that had previously been suspended too.

‘Deeply troubled’

While IHG did not specifically comment on what will happen to any constructions already underway, it stated: “We remain deeply troubled by the war in Ukraine and the humanitarian crisis it has caused. Following the outbreak of the war, we announced the suspension of future investments, development activity and new hotel openings in Russia and that we did not intend to resume any investment or development activity in the foreseeable future. We also closed our corporate office in Moscow.

“These steps followed significant donations to our humanitarian charity partners and a commitment to work with hotel owners in other countries to shelter refugees.”

Permanent withdrawal

The release continued: “Subsequently, on 8 April we announced that we have been in discussions with the owners of the 28 IHG-branded hotels in Russia regarding the complex, long-term management and franchise contracts under which these hotels operate.

“We are now in the process of ceasing all operations in Russia consistent with evolving UK, US and EU sanction regimes and the ongoing and increasing challenges of operating there.

“As we do this, we continue to remain focused on supporting our teams in Russia and in Ukraine, in line with our commitment to care for our people and the communities in which we operate.”

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