Talk about a destination wedding. The biggest hotel company in the world and a family-owned resort company with 24,000 rooms, many of them all-inclusive, have tied the knot.
Beginning in December, Intercontinental Hotels Group PLC (IHG) will add Iberostar Hotels & Resorts properties to its distribution system and 100-million-member frequency program, offering guests all-inclusive beachfront vacations they can book with points for the 2022 Holiday Season.
“In what is a large and high growth market segment, demand for resort and all-inclusive stays has been buoyed by increasing traveler desire for high-quality experiences and stress-free holidays, particularly post-Covid, and the ability to access such stays as part of loyalty programme membership,” the company said in the press release announcing the deal. “The breadth of resort choices for travelers has also increased in recent years, with luxury and upper upscale destinations creating more well-being and sustainability-led experiences that tailor to changing guest expectations.”
Iberostar, based in Spain, will retain ownership of the 70 or so properties that will make up the new IHG Iberostar Beachfront Resorts brand. Resorts in Mexico, the Dominican Republic, Jamaica, Brazil, and Spain’s Canary Islands will be on board by December, including Iberostar Grand Paraiso in Riviera Maya, Mexico; Iberostar Selection Hacienda Dominicus in Bayahibe, Dominican Republic; Iberostar Grand Rose Hall in Montego Bay, Jamaica; and Iberostar Selection Anthelia in Tenerife, 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 company said.
IHG has 260 resorts across its Six Senses, Regent, InterContinental, Kimpton, Hotel Indigo, Crowne Plaza, Holiday Inn, and Holiday Inn Club Vacations brands, but 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” and “meets a clear desire from guests and loyalty members for more resort destinations and the option of all-inclusive stays,” the company said.
IHG and Iberostar also will work together “to create opportunities for joint sustainability initiatives that align with IHG’s 2030 Journey to Tomorrow responsible business plan.”
Travel advisors and Wall Street are watching
Travel advisors seem split in their opinion of the move, and many question whether it’s a positive thing for the channel and its traditional distribution partners.
“It’s nice to see IHG getting bigger—and Iberostar Hotels are great,” said personal travel consultant Jill Ragovin at Tzell Park Avenue in New York.
Kari Mollan Valley doesn’t care one way or the other. “It doesn’t make a difference to me unless they honor membership points with wholesale bookings,” she said. “I never book all-inclusive direct with the brand; AM Resorts is Hyatt owned, but when I book via Classic, for example, clients do not receive their Hyatt points. Still, we prefer our supplier bookings on many levels: pricing, commission, and sales support.”
Exactly the problem, said travel consultant Nina Sherman at Lada Travel LLC in Richboro, PA. She sees it as an important move for the two players—but bad news for travel advisors.
“Marriott and Hyatt have become such major players with partnerships, I think IHG and Iberostar see this as a necessity,” she says. “But it is a huge threat for agents because clients that want loyalty points will force us to book direct. And it also jeopardizes the future of tour operators.”
InterContinental is the third-largest hotel company in the world, behind Marriott and Hilton (10 Biggest Hotel Companies and REITs (investopedia.com). Just today, MSN.com named it to a list of Best Hotel Stock to Buy Now (7 Best Hotel Stocks to Buy Now (msn.com)—but noted that year-over-year revenue is still lagging 2019 because of the company’s “larger exposure to business and international travel than some other hotel chains.”
Adding 400 all-inclusive properties that book direct might just help that number.