IHG & Iberostar Launch Strategic Partnership

IHG & Iberostar Launch Strategic Partnership

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IHG has just revealed the details of its 18th hotel brand…

Basics of the IHG & Iberostar alliance

InterContinental Hotels Group (IHG) and Iberostar have announced a long term commercial agreement. For those not familiar with Iberostar, it’s a family-run business based in Palma de Mallorca, Spain, which has been around for more than 65 years. The hotel group has a heavy focus on the all-inclusive beach resort sector, and also owns an airline, World2Fly.

World2Fly is owned by Iberostar

Iberostar will continue to maintain 100% ownership of its hotels, preserving its autonomy. However, up to 70 hotels (and 24,300 rooms) will be added to IHG’s system, under the Iberostar Beachfront Resorts brand. This will become IHG’s 18th hotel brand, and will boost IHG’s global system size by up to 3%. Iberostar will be included in a new “Exclusive Partners” category in IHG’s brand portfolio, alongside its Suites, Essentials, Premium, and Luxury & Lifestyle categories.

The first Iberostar property is set to join IHG’s systems in December 2022. The first resorts to join IHG will include Iberostar Grand Paraiso (Riviera Maya, Mexico), Iberostar Selection Hacienda Dominicus (Bayahibe, Dominican Republic), Iberostar Grand Rose Hall (Montego Bay, Jamaica), and Iberostar Selection Anthelia (Tenerife, Spain). Further properties in Spain, and other popular destinations in Southern Europe and North Africa, will join IHG’s systems over the course of 2023 and 2024.

With this partnership, Iberostar will gain access to IHG’s enterprise platform, including its distribution channels and the IHG One Rewards loyalty program, which has more than 100 million members. Meanwhile IHG will get increased awareness of its current brands with a new set of travelers, and give existing customers access to more properties.

Iberostar Grand Paraiso

My take on IHG’s partnership with Iberostar

This strategic alliance between IHG and Iberostar is different than some of the other hotel portfolio growth we’ve seen in the past. This obviously isn’t as major as a full-on acquisition (as we saw when IHG acquired Six Senses, for example), though it’s more significant than just a marketing partnership (like what we have between IHG and Mr & Mrs. Smith).

IHG isn’t actually buying a stake in Iberostar here, but this is a 30+ year partnership, and the Iberostar Beachfront Resorts brand will be integrated into IHG’s portfolio.

What’s not entirely clear is just how seamless the integration will be. Will IHG elite benefits fully be honored at these properties? What will capacity controls on award stays look like? Will all cash rates at Iberostar properties be eligible to earn points, or do you need to book through an IHG channel, and potentially pay more than the direct cost?

Ultimately it’s great when global loyalty program members have access to a larger portfolio of hotels. However, I find that IHG is especially bad when it comes to consistency and actually integrating new brands into its portfolio. For example, plans were announced for IHG to acquire Six Senses in early 2019, and several Six Senses properties still haven’t been integrated into IHG One Rewards.

Iberostar Selection Hacienda Dominicus

Bottom line

IHG and Iberostar are launching a new strategic alliance, which will see Iberostar Beachfront Resorts added as IHG’s 18th hotel brand. It’s expected that by 2024, up to 70 Iberostar properties will be integrated into IHG’s distribution channels and loyalty program.

For those who are into all-inclusives, this is no doubt a nice add. I’m just curious to see what the execution is like.

What do you make of IHG’s new alliance with Iberostar?

Conversations (4)
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  1. Phillip Gold

    I wish IHG would firstly sort out the acquisition of Six Senses before they go onto their next venture! That integration is a sorry affair and extremely disappointing all these years down the line!

  2. Sel, D. Guest

    Seems like a good fit for the Holiday Inn crowd. Hyatt’s AMR acquisition much more intriguing and got me swiping my Chase cards in a hurry.

  3. FNT Delta Diamond Guest

    It looks like guests will be able to access these new properties with IHG points, although we don't know at what pricing levels.

    Here's the relevant statement from the IHG press release:

    "In what is a large and high growth market segment, demand for resort and all-inclusive stays has been buoyed by increasing traveller desire ... to access such stays as part of loyalty programme membership."

    And IHG confirms that the Cuba properties of Ibeostar...

    It looks like guests will be able to access these new properties with IHG points, although we don't know at what pricing levels.

    Here's the relevant statement from the IHG press release:

    "In what is a large and high growth market segment, demand for resort and all-inclusive stays has been buoyed by increasing traveller desire ... to access such stays as part of loyalty programme membership."

    And IHG confirms that the Cuba properties of Ibeostar will be excluded. Presumably because of U.S. government sanctions:

    "The 70 properties are all beachfront resorts. They exclude Iberostar’s other operations, such as its smaller portfolio of urban hotels, and also exclude Iberostar’s interests in Cuba."

    I read the following statement to suggest that Ibeostar pursued IHG and not the other way around. Ibeostar will be paying significant fees (over $40 million by 2027) to access IHG customers:

    "Under the agreement, IHG will receive marketing, distribution, technology and other fees in a manner similar to its existing asset light model."

    https://www.hospitalitynet.org/news/4113606.html

  4. FNT Delta Diamond Guest

    This seems to be IHG responding to Marriott's all-inclusive additions, which have largely been uncovered here and elsewhere.

    While the Marriott all-inclusive properties vary greatly in quality and don't really fit within existing brands despite being flagged under brands like Autograph Collection, the properties actually have their own sub-set of elite status benefits within the Bonvoy ecosystem. Arguably, the benefits are much better (in theory) than staying at a regular, non-all-inclusive resort flagged under...

    This seems to be IHG responding to Marriott's all-inclusive additions, which have largely been uncovered here and elsewhere.

    While the Marriott all-inclusive properties vary greatly in quality and don't really fit within existing brands despite being flagged under brands like Autograph Collection, the properties actually have their own sub-set of elite status benefits within the Bonvoy ecosystem. Arguably, the benefits are much better (in theory) than staying at a regular, non-all-inclusive resort flagged under a Marriott brand.

    IHG's breakfast benefit wouldn't really be relevant if Ibeostar is an all-inclusive. The real benefits of interest would be access to any club lounges, upgrades and, of course, point-earning.

    It will be interesting to see if Ibeostar's properties in Cuba join IHG. I say interesting because U.S. government sanctions basically forced Marriott to exit Cuba's hotel market and stop plans for expansion beyond a Four Points that it operated.

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Phillip Gold

I wish IHG would firstly sort out the acquisition of Six Senses before they go onto their next venture! That integration is a sorry affair and extremely disappointing all these years down the line!

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Sel, D. Guest

Seems like a good fit for the Holiday Inn crowd. Hyatt’s AMR acquisition much more intriguing and got me swiping my Chase cards in a hurry.

0
FNT Delta Diamond Guest

It looks like guests will be able to access these new properties with IHG points, although we don't know at what pricing levels. Here's the relevant statement from the IHG press release: "In what is a large and high growth market segment, demand for resort and all-inclusive stays has been buoyed by increasing traveller desire ... to access such stays as part of loyalty programme membership." And IHG confirms that the Cuba properties of Ibeostar will be excluded. Presumably because of U.S. government sanctions: "The 70 properties are all beachfront resorts. They exclude Iberostar’s other operations, such as its smaller portfolio of urban hotels, and also exclude Iberostar’s interests in Cuba." I read the following statement to suggest that Ibeostar pursued IHG and not the other way around. Ibeostar will be paying significant fees (over $40 million by 2027) to access IHG customers: "Under the agreement, IHG will receive marketing, distribution, technology and other fees in a manner similar to its existing asset light model." https://www.hospitalitynet.org/news/4113606.html

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