This morning’s announcement that InterContinental Hotels Group (IHG) is acquiring a 51% stake in Regent Hotels & Resorts for $39 million in cash on the surface is a microscopic transaction, bringing aboard a mere six hotels and a pipeline of just three more properties. IHG already has over 5,000 properties, many under budget and cookie cutter brands such as Holiday Inn, Staybridge Suites and Crowne Plaza. From a financial perspective, in 2014, IHG paid $430 million in cash to acquire management contracts for Kimpton’s 62 locations. Marriott International’s purchase of Starwood Hotels and Resorts was pegged at $13 billion.
For IHG, which said it wants to grow the brand to 40 hotels and 10,000 rooms, the deal is significant because it finally gives the group a true 5-star flag to compete against The Ritz-Carlton and St. Regis of Marriott International, Hilton’s Waldorf Astoria, Park Hyatt and Four Seasons, which operates as the biggest monobrand luxury player. It also gives IHG a better proposition to hotel owners and developers as it competes for management deals with other fast-expanding uber luxury names such as Accor's Raffles, Dorchester Collection, Shangri-la Hotels and Resorts, Mandarin Oriental Hotel Group, and New World’s Rosewood Hotels & Resorts.
Beyond checking off the boxes that IHG as a publicly traded company needs to do, the deal serves an important purpose from a historical perspective in the luxury hotel segment, akin to preserving an architecturally important structure. There are few brands more beloved in the upper echelons of luxury hospitality than Regent, founded in 1971 by Robert Burns, Georg Rafael and Adrian Zecha.
Rafael went on to launch Rafael Hotels Limited (The Mark in New York, Turnberry Resort in North Miami and several other hotels in Europe that were acquired by Mandarin Oriental in 2000), Zecha founded Aman Resorts and Regent dipped into a quarter-century decline after its 1992 acquisition by Four Seasons. The Canadian acquirer opened some of Regent’s prized projects such as its I.M. Pei designed New York tower and hotels in Milan, Bali and Istanbul under its own Four Seasons flag. By the end of the decade, ownership had changed hands again to privately held Carlson Companies, which owned the Radisson brand and was also looking for an entrance into the growing luxury segment. During that time Carlson borrowed the Regent name, licensing it to its Seven Seas cruise line and switching the name from Radisson Seven Seas to Regent Seven Seas Cruises, where it still operates under Norwegian Cruise Line Holdings, Ltd.
In 2010 Regent’s ownership returned to Asia with Formosa International, which owns Regent Taipei, hoping to restore the brand and restart growth, something that never happened. IHG will be able to buy the remaining 49% beginning in 2026, according to the announcement. But significantly for luxury hotel lovers, IHG and Formosa said that after an extensive renovation, InterContinental Hong Kong will become a Regent once more in 2020. Opened in 1980, it heralded a new style of luxury hotel following the city’s grand dame, The Peninsula, and midcentury Mandarin Oriental. The story ended in 2001 after being bought by InterContinental when it was reflagged.
Ads to herald the opening unabashedly stated, “Once every generation Hong Kong gets a great new hotel.” From an innovation standpoint, Regent gave us the five-fixture bathroom, meaning bathtub, walk-in shower, separate toilet, and two sinks. With its sleek design and oversize picture windows in guest rooms and spectacular three-story-high lobby windows, it gave guests a birdseye view of Hong Kong harbor, almost as if one was floating on a yacht.
Like Barry Sternlicht would do with W Hotels at the end of the century, the trio identified a new luxury consumer, in this case, the globe-trotting, private jet riding, Brioni suit wearing CEO or financial trader who didn’t mind spending money and flashing it around. There was a club in the basement that was the epicenter of the then Colony's social scene with locals and Forbes 400 types from around-the-world mixing together into the early morning hours. If Gordon Gekko visited Hong Kong, The Regent would have been his hotel, and Burns, Rafael and Zecha did go global. Their New York hotel, The Regent Mayfair on Park Avenue on the Upper East Side, was the longtime home of Le Cirque, a favorite for the Big Apple’s power players. The setting for Pretty Woman, the 1990 movie starring Richard Gere and Julia Roberts, was The Regent Beverly Wilshire. Unlike snooty old-school luxury of the day where the front desk staff gave newcomers the up and down once over if you could pay your bill or were with somebody who could, you were warmly welcomed, old money or newly minted.
Whether IHG can do for Regent what Four Seasons, Carlson and Formosa couldn’t or didn’t want to do remains to be seen, however, based on IHG's work so far with Kimpton, there is a great hope. Current Regent locations include Beijing, Berlin, Chongqing, Porto Montenegro, Singapore and Taipei with Jakarta, Harbin and Phu Quoc in the pipeline. While the conversion of the Hong Kong property may be more symbolic or substance, it also portends IHG could be open to reflagging some of the 5-star hotels that operate under its InterContinental flag, a mix of 4-and 5-star hotels, to Regent. Its London Hyde Park location, Sydney and Washington D.C. (The Willard) properties jump to mind. Either way, there will probably be a few teary eyes the day that Regent returns to Hong Kong sometime early next decade.
