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Abu Dhabi, UAEWednesday 19 September 2018

IHG in talks with Saudi Arabia to bring luxury hotels to Red Sea tourism project

The group is entering preliminary talks on opportunities in Saudi’s $500bn NEOM mega-city

IHG is in talks with developers in the kingdom to bring its top brands, potentially the Intercontinental Resorts or Regent hotel, to the eco-resort spread over a lagoon of 50 islands, said Pascal Gauvin. Leslie Pableo for the National
IHG is in talks with developers in the kingdom to bring its top brands, potentially the Intercontinental Resorts or Regent hotel, to the eco-resort spread over a lagoon of 50 islands, said Pascal Gauvin. Leslie Pableo for the National

Intercontinental Hotels Group, which operates the Crowne Plaza and Holiday Inn brands among others, will bring its luxury hotels to Saudi Arabia's planned Red Sea tourism destination as the country pushes to transform its economy.

IHG is in talks with developers in the kingdom to bring its top brands, potentially the Intercontinental Resorts or Regent hotel, to the eco-resort spread over a lagoon of 50 islands, Pascal Gauvin, the managing director of India, Middle East and Africa at IHG, told The National on the sidelines of 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.”

The global hotel company is also entering preliminary talks to discuss business opportunities in Saudi Arabia’s NEOM project, a $500 billion mega-city on the Red Sea coast near the Egyptian resort of Sharm al Sheikh, Mr Gauvin said.

Initial groundbreaking at the Red Sea project is scheduled for the third quarter of 2019 with the first phase to be finished by the end of 2022 and will be developed by the kingdom’s sovereign wealth fund, the Public Investment Fund.

IHG is bullish on the Middle East market, where it seeks to grow by 25 percent its number of hotels over the next three to five years. It wants to capitalise on Saudi Arabia’s focus to develop its tourism industry on a large scale as the kingdom diversifies its economy away from reliance on petro-dollars.

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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 discussions are still ongoing and more meetings are scheduled, he said. It is “too premature” to decide on the number of hotels in the deal.

There is also a possibility 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. It’s got 31 hotels in Saudi Arabia and signed a deal with Hokair group to bring 10 Holiday Inn Express hotels to the Kingdom.

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