Retailing, Franchising, and Consumerism Business Intelligence in China

InterContinental Hotels Signs Landmark Deal In China

InterContinental Hotels Group this week signed a landmark deal with Chengdu International Exhibition and Convention Group to manage six hotels in Chengdu and Jiuzhaigou in China's Sichuan province.

The six hotels — two InterContinental properties, three Holiday Inn properties and one Express by Holiday Inn — comprise a total of more than 4,500 rooms.

This landmark signing in Sichuan marks a significant addition to InterContinental Hotels Group's already strong portfolio of about 50 hotels in Greater China.

It puts the Group in a strong position to reach its target of having 125 hotels open in China by 2008.

Chengdu, the strategically-located capital of Sichuan province, is both an emerging powerhouse and a popular tourism destination. It is a fast- developing city that has been named as one of the most livable cities China in and is one of the top-ranked cities for tourism and economic potential.

The Jiuzhaigou Scenic Area, a 45-minute flight from Chengdu, is known for its pristine beauty, with emerald lakes, layered waterfalls, colourful forests, snow peaks and Tibetan folk villages. The area is listed as a UNESCO (United Nations Educational, Scientific and Cultural Organization) World Natural Heritage site.

Andrew Cosslett, Chief Executive, IHG, who was in Chengdu for the signing, said: "This is the biggest single deal IHG has done in China, a country that lies at the heart of our growth strategy. Our brands have a strong foothold in Asia Pacific and Holiday Inn was one of the first international hotel brands to establish a presence there in 1984. This deal marks a major milestone as we move towards meeting our aggressive growth plans and we remain fully committed to maintaining our position as the leading hotel company in China."

Edmond Ip, InterContinental Hotels Group's chief operating officer for North Asia, said: "This latest deal is concrete proof that InterContinental Hotels Group is indeed the hotel partner of choice. Our growing portfolio clearly demonstrates that our partners recognise the value of our award- winning brands and have complete confidence in our ability to deliver memorable guest experiences coupled with exceptional business performance."

"We are pleased to cooperate with an experienced, international hotel operator like the InterContinental Hotels Group on this significant project. Our partnership with InterContinental Hotels Group combines their world- recognized hotel brands and established operating systems with our local market knowledge and property portfolio. We believe that this cooperation will also contribute to bringing Chengdu and Western China into sharper focus with the international business community," commented Deng Hong, Chairman of Chengdu Exhibition and Convention Group.

The scheduled openings will comprise the following hotels:

In Chengdu City, as part of the RMB 5 billion (US$620 million) New Century City international convention and exhibition centre, incorporating shopping, entertainment, offices, residences and a golf course:

— InterContinental Century City Chengdu, an upscale business hotel that will combine the latest communication and business technologies, high- end food and beverage options and conference facilities. Scheduled to open in 2007.

— The two Holiday Inn hotels at the Chengdu Century City New Convention and Exhibition Center are mid-scale hotels offering quality accommodation and business support services, specifically designed to host convention delegates. Scheduled to open in 2006.

At the Jiuzhaigou Scenic Area, as part of Jiuzhai Paradise, hailed as the 'Davos of China':

— InterContinental Resort Jiuzhai Paradise, an upscale hotel with eight FandB outlets and extensive conference and recreational facilities. Scheduled to open in 2006.

— Holiday Inn Jiuzhai Jarpo, a mid-scale hotel business services and spa facilities. Scheduled to open in 2006.

— Express by Holiday Inn Jiuzhai Jarpo, a convenience-sector hotel scheduled to open in 2007.

Chengdu International Exhibition and Convention Group has interests in exhibitions and conventions, hotels, travel agencies and real estate. The Group commands more than 70% market share for exhibitions and conventions in Chengdu and had total revenues of RMB2.2 billion (US$265 million) in 2005. The first stage of the New Century City project in Chengdu is scheduled for completion by end of 2006.

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