In 2019, InterContinental Hotels Group (IHG), a prominent player in the global hospitality industry, executed a strategic acquisition that would significantly enhance its presence in the luxury and wellness segments. The acquisition of Six Senses Hotels Resorts Spas marked a pivotal moment in IHG’s growth strategy, adding a high-end luxury resort brand with a strong emphasis on wellness. This case study explores the strategic rationale, integration process, and the far-reaching impact of this transformative acquisition.
Background
InterContinental Hotels Group (IHG)
Founded in 2003, IHG had established itself as a major force in the global hospitality sector, operating a diverse portfolio of brands across various market segments. The group was known for its commitment to quality service and its extensive network of properties worldwide.
Six Senses Hotels Resorts Spas
Founded in 1995, Six Senses was a renowned luxury resort brand known for its emphasis on wellness, sustainability, and providing unique and immersive guest experiences. The brand operated in some of the world’s most coveted destinations.
The Acquisition
Strategic Rationale
- Expansion in Luxury and Wellness: The acquisition allowed IHG to significantly enhance its presence in the high-end luxury hospitality sector, catering to discerning travelers seeking elevated experiences with a focus on wellness.
- Complementary Brand Philosophy: Six Senses’ commitment to wellness and sustainability aligned with IHG’s own values, making it a seamless addition to IHG’s brand portfolio and appealing to a growing segment of health-conscious travelers.
- Global Footprint Enhancement: Six Senses’ portfolio of properties, spread across key global markets, strategically positioned IHG to cater to luxury travelers in sought-after destinations.
Deal Structure
IHG acquired Six Senses Hotels Resorts Spas for approximately $300 million in cash. The transaction included the takeover of Six Senses’ hotel and spa management businesses, as well as its portfolio of owned and leased hotels.
Integration and Post-Acquisition Strategy
Brand Autonomy and Preservation
IHG adopted a strategy of maintaining the autonomy and distinctiveness of the Six Senses brand, respecting its unique identity and commitment to wellness. This approach preserved the brand’s distinctive guest experiences.
Wellness and Sustainability Initiatives
IHG leveraged Six Senses’ expertise in wellness and sustainability, incorporating their practices into IHG’s broader sustainability efforts and enhancing the wellness offerings across the entire IHG portfolio.
Portfolio Expansion
IHG worked on expanding the Six Senses portfolio by exploring opportunities for new property development and renovations, ensuring that the brand continued to meet the evolving needs and preferences of luxury travelers.
Impact on the Hospitality Industry
Elevated Presence in Luxury and Wellness
The acquisition of Six Senses significantly elevated IHG’s position in the luxury and wellness segments, providing guests with a wider range of options for premium, wellness-focused experiences.
Reinforcement of Sustainability Commitment
Six Senses’ strong sustainability ethos and IHG’s existing efforts in this area reinforced the group’s commitment to responsible and sustainable hospitality practices.
Industry Benchmark for Luxury and Wellness Offerings
The IHG-Six Senses acquisition set a benchmark for the importance of luxury and wellness offerings in the hospitality industry, showcasing the potential for growth and differentiation in these segments.
Conclusion
The acquisition of Six Senses Hotels Resorts Spas by InterContinental Hotels Group in 2019 exemplifies the strategic value of targeted acquisitions in the hospitality industry. By integrating Six Senses into its portfolio, IHG not only broadened its market reach but also strengthened its offerings in the luxury and wellness segments. This case study underscores the importance of thoughtful integration and strategic vision in the success of transformative acquisitions, ultimately benefiting both the acquiring company and its guests.
