Photo: IHG IHG Hotels & Resorts continues to expand by acquiring the European hotel chain Ruby for 116 million dollars.
With this move, the company adds a new premium brand to its portfolio and aims for more than 250 hotels in the next two decades.
IHG Hotels & Resorts announced the acquisition of the hotel brand owned by Ruby SARL and will pay 110.5 million euros (~116 million dollars) for it.
The deal includes the brand itself and the associated intellectual properties and marks another significant step in IHG's global expansion.
Founded in Germany in 2013, the Ruby brand specializes in upscale urban hotels offering a "Lean Luxury" hospitality experience – accessible luxury focusing on efficiency and space-saving. To date, the brand operates 20 hotels with 3,483 rooms in major European cities, including London, Munich, Zurich, Vienna, and Milan.
Additionally, 10 more hotels are currently under development and are expected to open within the next three years in cities like Rome, Marseille, Edinburgh, and Stockholm.
Ruby hotels offer a distinctive urban design with smart and automated services, including self-check-in stations and cost-effective maintenance, allowing for efficient operations and a particularly profitable economic model for hotel owners.
Ruby also stands out for its adaptation for the reuse of commercial assets – including converting office buildings into hotels, making it particularly attractive in the hotel real estate market.
IHG expands its brand portfolio and targets new destinations
IHG, already holding leading brands like InterContinental, Crowne Plaza, Holiday Inn, and Kimpton, sees Ruby as a strategic brand to strengthen its presence in the urban premium hotel market.
According to the plan, IHG will integrate Ruby hotels into its global distribution system by 2026 and provide them access to its loyalty program, IHG One Rewards, one of the largest in the world.
The company anticipates that by 2030, the brand's hotel count will exceed 120, and by 2045, it will reach 250 hotels worldwide, including entry into new markets in the USA and Asia.
Eli Malouf, CEO of IHG Hotels & Resorts, stated: "Acquiring Ruby enriches our portfolio with an innovative and sought-after brand, allowing us to expand our presence in leading cities and attract a new audience of travelers. We see immense potential for expanding the brand into the USA and Asia, as we have successfully done with previous acquisitions."
Michael Struck, founder and CEO of Ruby Group, added: "We chose IHG as the ideal partner to take our brand to the next level. The combination of IHG's expertise with Ruby's operational efficiency and unique model will lead to high returns for our investors and global growth."
Financial Aspects of the Deal
- IHG paid 110.5 million euros (116 million dollars) in the initial purchase, including an immediate payment of 109.9 million euros and an additional payment of 0.6 million euros once half of the hotels are integrated into the IHG system.
- According to forecasts, brand revenues are expected to reach around 15 million dollars by 2030.
- The brand is expected to expand significantly, with plans to add hotels beyond the existing development pipeline.
- IHG did not purchase the operational company of Ruby, and it will continue to manage its hotels under a franchise agreement.
- Incentives for further growth: IHG may pay up to an additional 190 million dollars by 2035 if the brand's room count reaches 20,000.
What's Next?
In 2025, IHG will begin integrating Ruby hotels into its management system, with full integration expected by March 2026. By 2028, all 30 active hotels and the current development pipeline will be under IHG, continuing to expand worldwide.
This deal highlights IHG's aggressive global expansion and establishes its position as one of the leading hospitality companies worldwide, with Ruby providing it a stronger foothold in the urban hotel market, offering a modern concept and efficient business model – a combination that promises long-term success.