IHG Hotels & Resorts and NOVUM Hospitality have inked a long-term deal that will allow IHG to double its footprint across Germany, one of Europe’s largest hotel markets and a growth priority for the company’s business, to over 200 properties in around 100 cities. The agreement also launches Holiday Inn – the niu brand collaboration and European debuts for the Garner and Candlewood Suites brands.
The agreement with NOVUM, the private hotel operator owned by David Etmenan, seeks to make IHG one of the leading players in midscale and upper midscale sectors.
NOVUM will adopt IHG brands and systems for the entire portfolio to become IHG’s biggest global franchisees, with access to IHG’s commercial engine and technology platforms to boost hotel performance, efficient operations and customer experience.
With a term of 30 years, the agreement has the option to renew for additional terms.
“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,” said IHG CEO Elie Maalouf.
Up to 108 NOVUM Hospitality open hotels, totaling 15,334 rooms and 11 hotels under development (totaling 2,369 rooms) will join IHG’s system between this year and 2028.
This year will see the phased conversion of the hotels to IHG, with majority of them expected to take place in the next 24 months. This will increase IHG’s global system by up to 1.9% in the next few years.
A total of 52 open and pipeline properties will become a part of IHG via the collaboration between Holiday Inn and the niu, NOVUM’s flagship, upper midscale brand. This will merge the domestic footprint of the niu with Holiday Inn’s global brand recognition to establish a position in a key target market. Other brands by NOVUM – Yggotel, Select and Novum – with 56 open and pipeline hotels will convert to Garner, IHG’s new midscale conversion brand. The acora Living the City brand, with 11 open and pipeline hotels, will convert to Candlewood Suites, IHG’s midscale extended stay brand.
Through the agreement, IHG will be expanding the presence of Candlewood Suites beyond the Americas for the first time.
As part of the agreement, IHG will receive franchise fees following the phased conversion of properties and upon opening of the hotels under development. Standard assessments will also be received into IHG’s System Fund, including those to cover the operation of IHG One Rewards, as well as marketing and reservation services.
IHG will contribute key money capital expenditure, which will reflect the conversion and timing of openings of the portfolio of properties.
The deal includes an exclusivity arrangement for future NOVUM hotels to become a part of IHG’s brands and enterprise system, with an ambition to jointly develop more properties in future.
“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 brand recognition of IHG,” said Etmenan, CEO and owner of NOVUM Hospitality.
“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 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.”
NOVUM has 111 hotels in Germany, with the remaining eight in Austria, the Netherlands and the U.K. IHG’s expansion in Germany will be aided by the investment in building localized commercial platforms, including the recent launch of loyalty collaborations and enhanced booking systems.
IHG anticipates its increased scale to benefit NOVUM and other IHG owners, including better brand awareness, direct bookings and loyalty engagement.