IHG Could Lose 103 Properties Due to Missed Payments
IHG has suffered due to COVID-19 like many other businesses in the travel industry. Now the company’s financial trouble could mean less hotels in North America.
SVC, a real estate investment trust which owns a diverse portfolio of hotels, has sent a notice of default and termination to InterContinental Hotels Group. The notice comes as a result of IHG’s failure to pay SVC approximately $8.4 million for the month of July 2020.
The termination notice says that IHG has 30 days, or until Monday, August 24, 2020, to make the payment plus accrued interest to avoid termination of its operating agreements with SVC. The effective date of the termination set in the notice is November 30, 2020. Another payment of approximately $17.4 million is also due on August 1, 2020.
SVC’s agreements with IHG covers 103 hotels (three InterContinental®, five Kimpton® Hotels & Restaurants, 11 Crowne Plaza®, three Holiday Inn®, 20 Staybridge Suites® and 61 Candlewood Suites®) in 30 states in the U.S., the District of Columbia, Ontario, Canada and Puerto Rico. If IHG fails to pay, management and branding of these 103 hotels from IHG to Sonesta International Hotels Corporation.
“SVC and IHG have had a long relationship and we are in regular dialogue with them. We hope IHG cures this default so that we can move forward without a termination and rebranding,” said John Murray, President and Chief Executive Officer of SVC. “If these hotels are all rebranded with Sonesta, we also expect that some of the transitioned hotels may be repurposed to an alternative use or sold in the future,” he said.
HT: Loyalty Lobby