Property company FelCor Lodging Trust (FLT) may sell or convert fifteen InterContinental Hotel Group (IHG) properties after renegotiating its management agreement with the British operator.
FLT owns 15,790 rooms which are managed by IHG.
Under the new contract FLT could now sell or convert 15 hotels (4,954 rooms), which may not retain the IHG flag, while a further nine hotels will also be sold by FLT retaining the IHG brand.
The new agreement also extends the contract terms of the remaining 17 hotels to 2025 with rebased incentive fee payments.
Eleven of these will also receive additional capital investment totalling $50m (£28m).
Under the restructuring, Hospitality Properties Trust (HPT) bought seven hotels from FLT for $160m (£89.6m) and will retain the IGH flag on these assets.
IHG has separately agreed to sell a further two assets to HPT for around $35m (£19.6m) – just under their combined book value.
Andrew Cosslett, IHG’s chief executive said: “Agreeing this deal with FelCor is a big step forward. It improves the quality of our brand distribution and lays out clearly performance criteria for both parties. We are also very happy to deepen our long-standing relationship with HPT.”
By Emily Manson
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