IHG in talks with Saudi Arabia to open up luxury Red Sea hotels

Intercontinental Hotels Group, whose portfolio includes the Crowne Plaza and Holiday Inn brands, will take its luxury hotels to Saudi Arabia’s planned Red Sea tourism destination, as the country transforms its economy.

IHG is in talks with developers in the kingdom to take its leading brands, which include the Intercontinental Resorts or Regent hotel, to the eco-resort in a lagoon of 50 islands, Pascal Gauvin, the managing director of India, Middle East and Africa at IHG, told The

National at the Arabian Travel Market in Dubai.

“We will be involved in the project in the Red Sea, we are working with them, we are looking at what brand will better fit their market, we are looking at what are their needs in terms of the environment and help them work in that direction,” he said. “There is a lot of common points between our thinking and what they want to do.”

Breaking ground is scheduled for the third quarter of 2019 with the first phase to be finished by the end of 2022. It will be developed by the kingdom’s sovereign wealth fund, the Public Investment Fund.

The hotel company is also preparing to discuss business opportunities in Neom, a $500 billion (Dh1.8 trillion), Mr Gauvin said.

IHG is bullish on the Middle East market, where it seeks to increase its number of hotels by 25 per cent over the next three to five years. It wants to capitalise on Saudi Arabia’s tourism industry as the kingdom moves its economy away from reliance on petro-dollars.

The first phase of the Red Sea project will include the development of hotels and luxury residential units, as well as all logistical infrastructure.

“They’re looking at the way they’re going to develop, what they want to start with, when will be the first resort and how long it will take to build, so really there’s a lot of details about logistics because you’re creating everything from scratch,” Mr Gauvin said.

IHG expects to sign contracts for the deal “for sure” but more meetings are scheduled, he said. It was “too premature” to decide on the number of hotels involved in the deal.

There may be an opportunity for IHG to introduce its lifestyle brands, the mid-scale hotels of Indigo or Holiday Inn, but plans for hotel types have yet to be finalised, he said.

IHG, which has 5,300 hotels globally, has 84 hotels in the Middle East and 31 of those are in Saudi Arabia. It has signed a deal with Hokair group to open 10 Holiday Inn Express hotels in the kingdom.