IHG and NOVUM sign agreement that doubles IHG’s hotel presence in Germany
Thursday, 9th May 2024
Source : IHG® Hotels & Resorts

IHG and NOVUM Hospitality announce a long-term agreement that will double IHG’s presence in Germany to more than 200 hotels in almost 100 cities through an exciting Holiday Inn – the niu brand collaboration and European debuts for IHG’s Garner and Candlewood Suites brands.

The agreement with NOVUM Hospitality, one of Germany’s largest private hotel operators, owned by David Etmenan, will make IHG one of the leading players in midscale and upper midscale, and includes the following key elements:

  • Up to 108 NOVUM Hospitality open hotels (15,334 rooms) and 11 hotels under development (2,369 rooms) are expected to join IHG’s system between 2024 and 2028. Conversion of the hotels to IHG’s system will happen in phases beginning in 2024, with the majority to take place over the next 24 months. This will increase IHG’s global system size by up to 1.9% over the coming years.
  • A total of 52 open and pipeline hotels will join IHG through a distinctive collaboration between Holiday Inn and the niu, NOVUM Hospitality’s stylish, flagship upper midscale brand. This will combine the domestic presence of the niu with Holiday Inn’s trusted reputation and global brand recognition to build a leading position in a key target market. NOVUM Hospitality’s other brands, Yggotel, Select and Novum with 56 open and pipeline hotels will convert to IHG’s new midscale conversion brand, Garner, and the acora Living the City brand with 11 open and pipeline hotels will convert to IHG’s midscale extended stay brand, Candlewood Suites.
  • Under the agreement, IHG will receive franchise fees after the phased conversion of existing properties and upon the opening of the hotels under development. Additionally, standard assessments will be received into IHG’s System Fund, including those to cover the operation of IHG One Rewards, and marketing and reservation services. IHG will contribute key money capital expenditure that will reflect the phased conversion and timing of openings of this major portfolio of hotels.
  • The agreement includes an exclusivity arrangement for future NOVUM Hospitality hotels to join IHG’s leading brands and enterprise system, with an ambition to jointly develop further hotels over time.
  • The agreement has a term of 30 years and the option to renew for additional terms.

A total of 111 NOVUM Hospitality properties are in Germany, with the remaining eight in Austria, the Netherlands and the UK. Germany is one of Europe’s largest hotel markets, with strong domestic consumption, inbound and outbound travel. In 2022, there were over 450 million overnight stays in Germany, the second highest in Europe, and the country generated the highest number of international outbound travellers globally, around 100 million.

IHG’s growth in Germany will be supported by continued investment in building localised commercial platforms, such as the recent introduction of loyalty partnerships and improved booking systems. IHG expects its increased scale to bring significant benefits to NOVUM Hospitality and other IHG owners, including higher brand awareness, direct bookings and loyalty engagement, to capture both domestic demand and German outbound business. It will also drive the development of IHG’s brands across more locations.

NOVUM Hospitality will adopt IHG brands and systems for this entire portfolio, becoming one of IHG’s largest franchisees globally, with access to IHG’s powerful commercial engine and technology platforms to drive hotel performance, efficient hotel operations and customer experience.

David Etmenan, Chief Executive Officer and Owner, NOVUM Hospitality (Left) and Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts (Right) 

Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts, said: “We are delighted to collaborate with such a respected group as NOVUM Hospitality and double IHG’s presence in Germany, one of Europe’s largest hotel markets and a growth priority for our business. This agreement demonstrates the appeal to owners of our powerful enterprise and IHG’s success in attracting excellent conversion opportunities to grow our system size. It also creates a strong domestic German platform to increase demand and brand awareness, as well as capture a larger share of the millions of outbound trips made each year across Europe and beyond.

We’re excited to bring a modern, bold and dynamic experience to market with our Holiday Inn - the niu collaboration, which pairs our world-famous Holiday Inn brand with a high-quality local brand that has an excellent, largely newly-built estate. Equally, bringing Garner to Europe in such a critical market as Germany is a great moment, as is taking Candlewood Suites outside of the Americas for the first time. Both IHG and NOVUM Hospitality share a deep commitment to true hospitality, quality and growth, and we look forward to expanding together in the years to come.”

David Etmenan, Chief Executive Officer and Owner, NOVUM Hospitality, commented: “Partnering with IHG, one of the world’s leading hotel companies, equips our family-run business with the firepower needed to fortify our market presence across Europe. This collaboration enables us to concentrate on delivering exceptional hotel experiences while leveraging the globally acclaimed brand recognition of IHG. Forging a co-brand between the niu and Holiday Inn sees two perfectly complementary brands come together, enhancing our appeal to guests on a global scale. Accessing IHG’s state-of-the-art global distribution network provides us with enhanced sales and revenue capabilities, ensuring sustained commercial success while retaining full flexibility and independence for NOVUM Hospitality, as the company remains in our ownership entirely.

Beyond the strategic advantages, the alignment of our values and principles throughout the negotiation process with IHG underscores the compatibility of our alliance. We deeply value the respect and consideration accorded to our the niu brand and eagerly anticipate the promising future that lies ahead in our joint endeavours.”

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