InterContinental Hotels Group has announced the €110.5 million acquisition of the Ruby brand which is represented around Europe and is planning a hotel in Edinburgh.

Established in 2013, the Ruby brand currently operates 20 hotels (3,483 rooms) in major cities across Europe and has another 10 in the pipeline, adding 2,235 rooms.

Those set to open over the next three years include Edinburgh, Marseille, Rome and Stockholm.

Ruby is partnering property management company Hunter REIM for one of the biggest ever investments in Edinburgh’s Princes Street.

The £100 million project, unveiled in November 2022, will see a 300-room hotel occupy seven floors over units left vacant by Next, Zara and Russell & Bromley which relocated to the St James Quarter.

The Ruby brand has achieved a compound annual growth rate of 26% over the last five years. IHG expects to have it ready for development in the US by the end of the year. It Is targeting the Ruby brand to grow to more than 120 hotels globally over the next 10 years and accelerate to more than 250 over 20 years.

Elie Maalouf, chief executive of IHG Hotels & Resorts, said: “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.”

Michael Struck, founder and CEO of the Munich-based Ruby Group, added: “We have carefully selected IHG as the right partner to take the Ruby brand and our international expansion to the next level.

“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.”

The seller’s operating company is not being acquired by IHG and will continue to operate the current open hotels and any future hotels that the seller develops under the brand.

Integration operating costs for IHG of approximately $10m are expected to be incurred in 2025. Including further one-time costs, IHG expects a breakeven contribution to its operating profit, with growth in profitability forecast thereafter.

The Windsor-headquartered company, whose other brands include Holiday Inn and Crowne Plaza, told markets this morning that revenue rose to $2.3bn (£1.82bn) in 2024, up seven per cent from $2.1bn in 2023.

Operating profit rose 10 per cent to $1.1bn, while earnings per share rose 15 per cent to 434.4 cents per share.

The company has proposed a final dividend of 114.4¢, resulting in a total dividend for the year of 167.6¢ for 2024, up 10 per cent year on year.

John Moore, senior investment manager at RBC Brewin Dolphin, said: “IHG has booked a strong set of results. They reflect the renewed focus and investment in the business, which continues today with the acquisition of Ruby – the company’s 20^th brand.

“Away from the solid numbers, there is also a subtle shift in the approach to shareholder returns, with the dividend reduced in favour of share buy backs – a move that is consistent with a more US approach to shareholder returns and, perhaps, reflects IHG’s desire to be as successful at attracting global investors as it is at attracting global travellers. 

“The share price has performed well over the last few years, but with plentiful investment opportunities and a growing demand for travel, there remains the potential for positive momentum.”

Radisson plan

The UK’s first Radisson Hotel & Serviced Apartments concept, replacing a collection of dilapidated buildings in Glasgow, is taking a step forward with a final public consultation.

Presented by Glasgow family business, Regent Property Group, the development is located at 90/96 Maxwell Street, former home to Fury Murrys night club, and supports the regeneration of the St Enoch area.

The proposed plans, by architects HAUS, include a rooftop lounge and restaurant, providing panoramic views across the city, as well as a restaurant on the ground floor, a gym and meeting space.