InterContinental Hotels Group's acquisition of
Six Senses Hotels Resorts Spas gives it a lot more than a new luxury brand. The
purchase puts IHG squarely in the lead among mainstream hotel companies
looking to capitalize on the booming demand for authentic and sustainable
The deal adds Six Senses' hotel and spa operations to IHG's
high-end portfolio, though no real estate assets were included in the
transaction. Six Senses manages 16 hotels and resorts under the Six Senses and
Evason brands as well as 37 spas under the Six Senses and LivNordic brands. The
company also provides spa consultancy services.
According to Beth McGroarty, vice president of research for
the Global Wellness Institute, Six Senses is a clear standout within the
wellness sector and is known for being an innovator within a rapidly expanding
and increasingly competitive field.
McGroarty said the acquisition seems like "a coup for
IHG, as Six Senses has really established themselves as the most powerful and
pioneering brand in wellness travel. As a researcher in the industry, I pay the
closest attention to what they do, because they constantly prove themselves to
be ahead of the curve, whether in wellness programs, the emerging travel
markets they choose to go into or in architecture and design."
Six Senses was founded in 1995 by Sonu Shivdasani, a British
hotelier and sustainable tourism trailblazer who then sold the brand to Pegasus
in 2012 for an undisclosed sum.
While Six Senses' development has traditionally focused on
far-flung resort destinations such as Fiji, Oman and markets throughout Asia,
the brand opened its first city property in Singapore's Chinatown last year. A
second Singapore property is set to open in December, and the brand is
developing its first U.S. property in New York.
Lalia Rach, an industry consultant and former dean at New
York University's Jonathan M. Tisch Center for Hospitality and Tourism, agreed
that Six Senses was a savvy buy for IHG, but she pointed out that the brand's
continued success will be dependent on IHG having a "light touch"
with its takeover.
"From an IHG perspective, it makes really good sense
for them to have targeted this brand, because Six Senses does a spectacular job
of delivering what they promise," Rach said. "Hotels have discovered
that there is a segment of society that will pay for an extreme wellness
experience, but those who can afford it have very high expectations."
As for challenges, Rach said, "IHG's greatest hurdle
will be in merging Six Senses with its family of brands and allowing it to
continue to be as unique and special as it is."
She added that IHG's relatively successful track record of
integrating high-end and boutique acquisitions like Kimpton Hotels &
Restaurants in 2015 and Regent Hotels & Resorts last year make a seamless
transition for Six Senses more likely.
Industry consultant Bjorn Hanson, an adjunct professor at
the Tisch Center, also said he believes that Six Senses devotees shouldn't be
overly concerned about the brand getting watered down within the IHG stable.
"IHG was actually one of the first companies to take on
a more locally managed approach, with less of a controlling corporate culture,"
Hanson said. "The systems and support are there, but IHG has always been
somewhat more hands off when it comes to allowing local managers and owners to
decide what's best. I think that for IHG, Six Senses and consumers, this is a
positive next step."
Meanwhile, IHG's investment comes as the overall wellness
tourism segment grows at a breakneck pace. The Global Wellness Institute
reports that the sector grew from a $563 billion market in 2015 to $639 billion
in 2017 and is forecasted to reach $919 billion, a rate of 7.5% average annual
growth, through 2022.
Consequently, IHG isn't alone in targeting the upper end of
the wellness space. In 2017, Hyatt acquired luxury wellness resort and spa
brand Miraval for $215 million. Miraval operates two resorts, in Tucson and
Austin, with a third being developed in the Berkshires in Massachusetts.
According to Rach, however, IHG's purchase of Six Senses is
likely to have a much bigger impact on the market than the Miraval deal had.
"The Six Senses deal is a game-changer, and this is
going to create much bigger waves," she said. "If you look at the
major players in the true hotel luxury sector, it's very competitive, and so
now it's really more about how you will compete for tomorrow. I think this
purchase, for IHG, sets them up to compete tomorrow. It'll be interesting to
see how Hilton and Marriott respond to this move."