Back to top

Analyst Blog

InterContinental Hotels Group (IHG - Snapshot Report) recently completed the first phase renovation at its Sao Paulo property. InterContinental Sao Paulo is one of the most renowned business-oriented properties in the popular Brazilian tourist destination. This explains the ongoing multi-phase renovation at the 20-storied, 194-guest room hotel. 

In the first phase, lobby, restaurants and half of its guest rooms were revamped. Implementation plans for the second phase are currently being finalized. During the second phase, the current lobby will be transformed into a social gathering area, which will have a bar and ample seating.

Since late 2010, hotel companies are working hard on improving guest satisfaction to uplift their positions in a cutthroat environment. Following the facelift trend, in March, one of InterContinental’s peers Starwood Hotels & Resorts Worldwide Inc. (HOT - Analyst Report) also announced similar plans for The Sheraton, New York, one of the largest hotels in New York City Starwood will shell out $150 million for the renovation, which will be completed in two phases. The first of these phases was completed last month.

Another hotel, The Hilton Milwaukee City Center, in Wisconsin recently completed an $11.5 million renovation program. This was also a multi-phase project under which the hotel’s guest rooms, lobby area, public spaces and fitness center were redesigned

In Latin America, InterContinental has proven brand equity with 64 years of operation behind it in the market and 200 hotels in Mexico, Central and South America and the Caribbean. We believe renovation of existing properties will strengthen its brand name in the region, which not only has a populace of over half a billion but also attracts tourists in large numbers mostly due to an abundance of natural resources.

InterContinental Hotels currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.