InterContinental Sale of 16 Staybridge Suites

InterContinental Hotels Group PLC (IHG) today announces it has sold 16
Staybridge Suites? hotels in the United States to Hospitality Properties
Trust (HPT) for $185 million in cash. As part of the transaction these
hotels continue to operate within the Staybridge Suites? brand, IHG having
entered into a management agreement on these hotels with HPT for a period
of 20 years with options to extend. The amount paid by HPT is over $15
million more than the book value of the assets and the sale will not have a
material effect on earnings in the year to December 2003.
Commenting on the transaction Richard North, Chief Executive,
InterContinental Hotels Group said:
“We have successfully developed and grown the Staybridge Suites? brand over
the last five years and it now has critical mass in the upscale extended
stay segment. As a consequence, we no longer need to own these assets. The
deal is consistent with our strategy to prove brand concepts and then
reduce capital intensity whilst converting the income stream into
management or franchise fees. HPT is one of the strongest and most
respected real estate investment trusts in the market and we are delighted
to be working in partnership with the”

Richard Solomons, Finance Director, InterContinental Hotels Group said:

“The Staybridge Suites? brand is making good progress with 55 hotels open
and over 40 in the pipeline. This transaction is a direct consequence of
the continuing review of our asset base and represents a step along the
path to improving the group?s return on capital.”

Staybridge Suites is IHG?s organically developed upscale extended stay
brand offering self-catering services and amenities designed specifically
for those on extended travel. There are 55 Staybridge Suites hotels, all of
which are located in the Americas, representing 1% of IHG?s total rooms.
These properties are now split 4 owned and leased, 16 managed and 35
The transaction involves the sale of 16 Staybridge Suites hotels in the
United States to HPT for $185 million. IHG has simultaneously entered into
a long term management agreement with HPT .

The transaction has features typical of HPT transactions: an owner?s
priority return of $16.9 million per year, plus percentage participations
in operating revenues in excess of negotiated amounts; retention of a
security deposit equal to $16.9 million; 5% of gross revenues at the hotels
will be escrowed for capital expenditures; and payment of the owner?s
priority return to HPT is guaranteed by IHG until the financial results
from IHG?s operations of these hotels reaches negotiated levels. IHG?s
management contract for these hotels has an initial term expiring in 2023
and IHG has two renewal options for 12.5 years each thereafter.


The 16 hotels purchased by HPT have 1,960 guest suites and are
geographically diversified in 11 states: California (2); Colorado; Florida;
Georgia (2); Maryland; Massachusetts (2); Michigan; North Carolina; South
Carolina; Texas (3); and Washington State. The average age of these hotels
is about three years.

InterContinental Hotels Group PLC of the United Kingdom [LON:IHG, NYSE:IHG
(ADRs)], owns, manages, leases or franchises, through various subsidiaries,
more than 3,300 hotels and 515,000 guest rooms in nearly 100 countries and
territories around the world ( The Group owns
a portfolio of well recognised and respected hotel brands including
InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday
Inn, Express by Holiday Inn and Staybridge Suites, and also has a
controlling interest in Britvic, the second largest soft drinks
manufacturer in the UK.