Ruby forms strategic cooperation with IHG to accelerate profitable growth, particularly targeting the U.S. and Asia

Since its establishment by Founder and CEO Michael Struck in 2013, the Ruby brand has redefined upscale urban hospitality, blending contemporary design, space efficiency, and a disruptive approach to hotel operations. With 20 hotels open across Europe and 10 more in the pipeline, including Stockholm, Edinburgh, and Marseille, the Ruby brand has built a strong reputation as a stylish, space-conscious lifestyle brand that delivers affordable luxury experiences – Ruby refers to its philosophy as ‘Lean Luxury’ - in sought-after city destinations.

Cooperation delivers multiple benefits

The Ruby Group now joins forces with global hospitality leader IHG to accelerate the company’s international expansion. The cooperation provides access to IHG’s distribution platforms across the world and will help to accelerate the growth of the Ruby Group across new markets, where it has set its sights particularly on the U.S. and Asia. In parallel, the Ruby Group expects the cooperation to improve its hotel margins, both by reducing distribution costs and increasing revenue per available room (RevPAR): Via lower OTA commission rates and credit card rates, more direct bookings, and more business from global corporate accounts, particularly from source markets with a higher price propensity.

Opportunity for real estate partners

For real estate partners, this collaboration presents a powerful opportunity, enhancing profit margins and, consequently, rent potential. Additionally, the brand divestment further strengthens Ruby Group’s already strong financial covenant. This comes at an opportune moment: The brand’s highly adaptable, space-efficient model is met with an increasing number of opportunities for adaptive re-use of underutilized office and retail spaces – an area where the Ruby Group, from its inception, has built a strong track record, based on innovative planning, construction, and design solutions. With Ruby’s growth set to accelerate, the goal of Ruby Group’s founder and his team now appears to be within close reach: To establish Ruby as a ‘love brand’ and a leader of the globally growing Affordable Luxury segment.

Well-balanced cooperation framework to sustain success model

While there are no changes at the shareholder level and the Ruby Group continues to operate independently, the cooperation involves IHG acquiring the Ruby brand, with the aim to grow a third-party franchise business. A strategic cooperation framework agreed between the Ruby Group and IHG specifies how IHG and the Ruby Group will collaborate closely in the future development of the brand to preserve its distinctive spirit and its role as disruptive innovator in the industry. The framework also provides for highly efficient collaboration processes in hotel planning and construction, preserving the Ruby brand’s flexibility, space efficiency and investment efficiency, which the brand owes not least to its distinctive modular architectural system. Lastly, and most importantly, the framework agreement safeguards Ruby Group’s highly efficient operating model, including the automatizations and self-service elements which it has developed to achieve its low labour cost ratios combined with high, personal service levels.

Michael Struck, Founder and CEO of the Ruby Group, said: [i"We have carefully selected IHG as the right partner to take the Ruby brand and our company’s international expansion to the next level. IHG’s powerful distribution network, Ruby’s strong fit within IHG’s brand portfolio, and its proven track record of successfully preserving brand identity and culture when integrating new brands give us great confidence as we embark on this next chapter together. By combining IHG’s global reach and resources with the efficiency advantages of our operational and construction model, we will deliver superior returns for both our investors and real estate partners. The timing couldn’t be better - demand for our unique solutions in adaptive office space re-use is rising, positioning us for strong growth.”[/i]

Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts, added: “We are delighted with the acquisition of Ruby, which further enriches our portfolio with an exciting, distinct and high-quality offer for both guests and owners in popular city destinations. This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience of integrating and growing brands and hotel portfolios. The urban micro space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand Ruby’s strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions.”

About Ruby Hotels:

The Ruby Group under the leadership of founder and CEO Michael Struck is breaking new ground with its Lean Luxury philosophy. With a lean organisational structure and concentration on the essentials, Ruby succeeds in creating a contemporary, affordable form of luxury for modern, cost and style-conscious customers. Founded in 2013, the group operates 20 Ruby hotels across Europe, with an additional 10 hotels currently under construction or in the planning phase. Ruby also offers Ruby Workspaces – perfectly equipped workplaces and a creative atmosphere with access to an inspiring office community. Financially strong shareholders support Ruby’s expansion: ECE Group; the Austrian Soravia Group; Franger Investment, a German family office; Ocean Link, a private equity fund; the investor Michael Hehn; and Michael Struck jointly hold the company shares.

About IHG Hotels & Resorts:
IHG Hotels & Resorts (tickers: LON:IHG for Ordinary Shares; NYSE: IHG for ADRs) is a global hospitality company, with a purpose to provide True Hospitality for Good.

With a family of 19 hotel brands and IHG One Rewards, one of the world’s largest hotel loyalty programmes, IHG has over 6,600 open hotels in more than 100 countries, and a development pipeline of over 2,200 properties.

• Luxury & Lifestyle: Six Senses Hotels Resorts Spas, Regent Hotels & Resorts, InterContinental Hotels & Resorts, Vignette Collection, Kimpton Hotels & Restaurants, Hotel Indigo
• Premium: voco hotels, HUALUXE Hotels & Resorts, Crowne Plaza Hotels & Resorts, EVEN Hotels
• Essentials: Holiday Inn Express, Holiday Inn Hotels & Resorts, Garner hotels, avid hotels
• Suites: Atwell Suites, Staybridge Suites, Holiday Inn Club Vacations, Candlewood Suites
• Exclusive Partners: Iberostar Beachfront Resorts

InterContinental Hotels Group PLC is the Group’s holding company and is incorporated and registered in England and Wales. Approximately 385,000 people work across IHG’s hotels and corporate offices globally.

Visit us online for more about our hotels and reservations and IHG One Rewards. To download the IHG One Rewards app, visit the Apple App or Google Play stores.

For our latest news, visit our Newsroom and follow us on LinkedIn.