InterContinental Hotels Group Plc (£IHG) - A Valuation On 17th May 2021

This asset-light global hotel business saw demand for their services crushed by the pandemic. As the world opens back up, how much competition will they face from non-hotel operators like Airbnb?

The Story

The InterContinental Hotels Group is an asset-light global hotel business. The company was originally part of a much larger hospitality group called the Bass Brewery Group.

In 1988, the British government limited the number of pubs that brewers could own directly, so Bass committed to expanding their hotel business. This led them to acquire the Inter-Continental Hotels Corporation from the Saison Group in 1998. In 2000, Bass sold off all their brewery assets and changed the name to Six Continents Plc.

Then, in 2003, the company split into two: the first, Mitchells & Butlers, took all the pub, restaurant and bar businesses, while the other, InterContinental Hotels Group, took all the hotels and the soft-drink business. In 2006, IHG sold off the soft-drink business, Britvic, through an IPO. Then, in 2008, the company relaunched the Holiday Inn brand.