InterContinental Hotels Group (IHG) has acquired premium urban lifestyle brand, Ruby, for €110.5 million (~AU$181.5m) from Ruby SARL, as part of a master franchise and development agreement.
Established in 2013, the Ruby brand – 20th brand in the IHG portfolio – currently operates 20 hotels (3,483 rooms) in major cities across Europe and has another 10 pipeline hotels (2,235 rooms).
Targeting modern travellers in must-visit city destinations, Ruby offers space-efficient designs and a flexible concept that IHG expects to expand rapidly across the globe.
“We are delighted with the acquisition of Ruby, which further enriches our portfolio with an exciting, distinct and high-quality offer for both guests and owners in popular city destinations,” said IHG Hotels and Resorts Chief Executive Officer, Elie Maalouf.
“This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience of integrating and growing brands and hotel portfolios.
“The urban micro space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand Ruby’s strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions.”
Already well-established in Europe, with hotels in Germany, the UK, Austria, Switzerland, Italy, Ireland and the Netherlands, Ruby is set to expand to more European cities over the next three years, including Edinburgh, Marseille, Rome and Stockholm.
IHG is targeting the Ruby brand to grow to more than 120 hotels over the next 10 years and accelerate to more than 250 over 20 years across owners globally. Franchise fees are anticipated to be in excess of US$15 million by 2030.
IHG believes Ruby’s cost-efficient and highly adaptable premium hotel concept with a focus on technology will be attractive to hotel owners.
“IHG expects the urban micro sub-segment to continue experiencing strong demand from travellers around the world, and this in turn would support ongoing rooms supply growth at higher rates than the global hotel industry,” IHG said in a statement.
“We have carefully selected IHG as the right partner to take the Ruby brand and our international expansion to the next level,” said The Ruby Group Founder and CEO, Michael Struck.
“IHG’s distribution powerhouse, the fact that Ruby perfectly complements IHG’s portfolio, and its proven track record of successfully preserving identity and culture when integrating brands gives us great confidence as we embark on this next chapter together.
“Combining the global reach and resources of IHG with the efficiency advantages of our operational and construction model will drive superior returns for our investors and real-estate partners, alike. Also, the timing could not be better. Our unique solutions for efficient adaptive re-use of office space are in high demand, positioning us for strong growth.”
Integration of all 20 currently open Ruby hotels into IHG’s system is expected to commence later in 2025 and be completed by 31 March 2026, increasing IHG’s global system size by approximately 0.3%.