LONDON: InterContinental Hotels Group, the world’s largest hotelier, said yesterday it had agreed to allow rival Queens Moat Houses to use its brand name under a franchise agreement for 20 years.
The owners of Queens Moat Houses – US-based investors Goldman Sachs, said half of its 32 Moat Houses will be franchised to InterContinental in line with the new corporate strategy of the group. InterContinental will use its Holiday Inn and Crowne Plaza branding on the 16 Moat House properties in exchange for a royalty fee estimated between 3 and 5 percent of profits.
Although it effectively means the end for the brand ‘Queen Moats House’, it is expected to bring in more revenues from the franchise than while being run as Moat Houses.
The ‘Queens Moat House’ brand was in the 70’s and 80’s a very successful brand. However, the fortunes of the UK hotel group changed and a downturn began which led to the near collapse of the business in 1993. With debts having mounted to Ł630 million, the management had no option but to put up the 32-strong estate for sale. Goldman Sach’s property investment wing Whitehall Partners took over the group for around Ł54 million last year.
There is also good reason to believe that the group has put up another 8 Moat Houses for sale and is considering options for the remaining 8. Queens Moat Houses have only two options before them – a franchise similar to the InterContinental deal or a sale of the properties to independent operators.
11 of the franchised Moat Houses will be refurbished and converted into Holiday Inns and two into Crowne Plazas. IGH have yet to decide about the remaining three. The franchised establishments will continue to be managed by Queens Moat Houses.
The Moat Houses on Doncaster, Harrogate and Stratford are among those slated to become Holiday Inns.
For IGH the deal is similar to Stardon Hotels whose five establishments were last month franchised to IGH bringing the total number of InterContinental brand establishments to 227 in the UK.