InterContinental Hotels Group (IHG) announced it has acquired the Ruby hotel brand from Munich-based Ruby GmbH for 110.5 million euros ($115.8 million). The brand is described as “urban micro.” The deal does not include Ruby’s operating company, which will continue to manage all Ruby hotels open and currently in development.

Ruby has a portfolio of 20 hotels and 3,483 rooms open in Europe — including nine hotels in Germany, three in the UK, three in Austria, two in Switzerland, and one each in Italy, Ireland and the Netherlands. Ruby’s hotel development pipeline includes 10 hotels and more than 2,200 rooms.

During an earnings conference call, Elie Maalouf, IHG CEO, said the purchase “just really hits the spot in an area we have been looking at, urban micro.” He added, “It is something we can scale up very quickly.”

In a press release, Maalouf said, “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.”

IHG envisages a portfolio of 120 Ruby hotels in the next five years and 250 in the next 10. Maalouf said the company plans to integrate the Ruby portfolio into its systems by March 31, 2026. He cautioned that the brand would not break even in IHG’s operating profit until 2026, but the company forecasts a greater impact on its profitability in the years ahead. “It has a lot of growth potential,” Maalouf said.

Image: IHG