LONDON: Intercontinental Hotels Group Plc. is setting up a joint venture with Japan's All Nippon Airways Co. to manage hotel business in Japan. It will invest around 8 billion pounds in the venture, to be called IHG ANA Hotels Group Japan and will have a majority holding of 74 per cent.
All Nippon Airways has a hotel unit in Japan, operating some 31 hotels. Once the joint venture is formalized and set up, it will take over the management of these hotels, the two companies said. Thirteen of these hotels will be rebranded over the next 18 months getting one of the three co-brands created for Japan -- ANA-InterContinental, ANA-Crowne Plaza and ANA-Holiday Inn. The hotel in Tokyo will be the first to be being renamed -- as ANA-InterContinental Tokyo in April 2007.
The joint venture will also operate the 18 hotels now managed by All Nippon Airways, the owners of which will have an opportunity to be rebranded under the same co-brands.
InterContinental currently runs 11 hotels in Japan.
A spokesperson for All Nippon Airways declined to specify the value of the deal.
The hotel business had generated around 5 per cent of the company's total sales for the year ended March. The company has been reducing its real estate exposure in an effort to concentrate on the domestic aviation market, where it is capturing market share from Japan Airlines Corp.
InterContinental said in a regulatory news service statement the joint venture will probably add to earnings in its third year of operation. Chief executive officer Andrew Cosslett said the deal marked another significant step for the company as it continued to develop its brands throughout Asia.
While InterContinental will have 74 per cent in the venture, All Nippon will own 25 per cent and a joint-holding company will have a 1 per cent stake. The company said the joint venture will invest some 10 million pounds in a brand building exercise and research, while it will provide 7 million pounds to implement an improved IT platform.
