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InterContinental sees 'incredible' long-term market in UK
INTERCONTINENTAL Hotels Group sees an "incredible" long-term market in London and the UK, chief executive officer Keith Barr said, shrugging off the uncertainty fuelled by the vote to quit the European Union.
"It's only 5 per cent of our business globally, but it's where we are based and we think there is more opportunity for us to grow all of our brands in the market," he said in an interview with Bloomberg Television in Dubai on Thursday.
While buying assets in the UK is not consistent with the group's strategy, "partnering with key strategic owners is something we're very focused on", he said.
The comments come against the backdrop of concerns about the UK's economic outlook after Brexit and whether immigration controls would make it harder to hire workers, particularly in labour-intensive industries sectors like hospitality.
Property prices in London had their first drop since 2009 in February. Sales of homes under construction, however, rose in the first quarter.
Mr Barr, who took over from Richard Solomons in June, is focusing on developing the company's luxury offerings to capture market share following its purchase of Kimpton Hotels & Restaurants in 2014.
InterContinental has about 80,000 rooms in its luxury division, which delivered US$4 billion in revenues in 2017, plus a further 20,000 rooms in the pipeline.
But the CEO also said he sees rising demand for mid-range hotels especially in countries like Saudi Arabia, where the government is focusing on developing tourism as it tries to diversify away oil.
There are "significant changes taking place in Saudi economically, which will drive domestic tourism and really overall business growth in Saudi; so it's exciting", Mr Barr said.
InterContinental, which has about 30,000 hotel rooms in the Middle East compared with 800,000 rooms globally, plans to expand 25 per cent in the region within the next five years.
Mr Barr said that 75 per cent of the planned expansion will take place in Saudi Arabia and the United Arab Emirates (UAE), where Dubai is gearing up to host Expo 2020.
He expected the event to help revive a UAE market currently struggling with supply exceeding demand. BLOOMBERG