Richard Solomons, the CEO of InterContinental Hotels Group, is stepping down on June 30 and will replaced by current chief commercial officer Keith Barr. Solomons joined IHG 25 years ago and has held the CEO position for the last six years.
The announcement was made during IHG's first quarter trading update, a short, cursory call that concluded without a single question asked. Solomon's announcement bookended the session, stating his decision to retire almost immediately.
"I'll be retiring from IHG at the end of August, and stepping down from my post as CEO on the 30th of June," Solomons said. "There is never a perfect time to make this decision, but the time feels right for me. I've served IHG for 25 years, 14 of which on the company's board of directors and six as CEO.
Barr joined IHG in 2000 and has held senior leadership positions in IHG's Americas, Asia, Middle East and Africa (AMEA) and Greater China regions, including four years as CEO of IHG's Greater China business. He was appointed chief commercial officer in May 2013.
Patrick Cescau, chairman of IHG, commented on Solomons departure saying: "It has been a pleasure to work with Richard, and on behalf of the Board and our colleagues I want to thank him for his successful leadership of IHG. Richard has been an outstanding CEO and a driving force behind IHG becoming the leading global organization it is today. He has created exceptional shareholder value and as CFO successfully steered the group through the financial crisis. He has executed our winning strategy with a sharp focus on developing our brands, guest experience and loyalty proposition, as well as the digital transformation of the business. Although we are sorry to see him go, we respect and understand his decision to retire and wish him all the very best for the future."
Regarding his departure, Solomons said: "It has been a privilege to have spent the last 25 years working in such a dynamic business and alongside an outstanding executive team, talented colleagues across the business and our dedicated hotel owners. I am proud of the success we have achieved since IHG became a standalone business in 2003, not least completing our transition to becoming an asset-light business, launching a series of innovative new hotel brands and new concepts for our heritage brands, acquiring Kimpton Hotels & Restaurants and creating value for shareholders. Keith has been an outstanding leader in the business and is clearly the right person to lead IHG to continued future success."
On his appointment to CEO, Barr commented: "I am honored to be appointed CEO of one of the world's leading hotel companies and to have the opportunity to lead IHG. Building on Richard's leadership and IHG's strong performance track record, we will continue to focus on developing our portfolio of brands, delivering consistent, high-quality growth and creating value."
"This announcement will be my 55th at IHG, and it will be my last," Solomons said later in the call. "I'm confident I'll be handing the company over in good hands."
Under Solomons lead, IHG acquired Kimpton Hotels & Restaurants in late 2014 for $430 million, and launched such new brands as wellness-minded Even and Hualuxe in China.
In February, we tapped Solomons for his thoughts on the hotel industry and IHG's goals.
The company has steered clear of some of the recent massive, large-scale M&A, even though the company has, at times, been rumored to be a target of acquisition or having an acquisition appetite of its own.
We spoke to Solomons recently at the International Hotel Investment Conference in Berlin. Here's our interview with him:
Aside from Solomon’s surprise retirement, IHG’s CEO said the company’s first-quarter 2017 results were strong with revenue per available room up 2.7 percent, driven by increases in rate (up 0.8 percent) and occupancy (up 1.2 percent). IHG also reported 3.4 net system size growth year-over-year, bolstered by the company’s 300th opening in Greater China.
IHG CFO Paul Edgecliffe-Johnson said in the call that the company’s Americas region reported a 1.9-percent increase in RevPAR. The company saw stabilization in oil-producing markets (up 1 percent), which have struggled in recent years. Mexico RevPAR was up 10 percent, while Canada and Latin America saw increases of around 3 percent each.
IHG’s Europe RevPAR was up 6.9 percent, and IHG out performing the industry in Europe with 8-percent growth to RevPAR, rate up 5 percent and occupancy increasing 1.8 percent.
Asia and the EMEA region saw RevPAR increase just 0.1 percent in Q1, though outside of the Middle East the number was closer to a 4-percent gain. Greater China saw a RevPAR increase of 3.8 percent, and India’s RevPAR gain of 13 percent was driven primarily by tourist arrivals following the easing of visa conditions. The Middle East suffered the most, with a RevPAR decline of 7 percent due to low oil prices, sky-high supply and political instability.
“We saw good RevPAR growth across all regions,” Edgecliffe-Johnson said. “Easter benefitted Americas and Europe, a result that is expected to reverse in Q2. Despite all the political and economic uncertainty throughout the world we remain confident.”
Edgecliffe-Johnson closed out the call with a final remark to Solomons on his decision to retire: “Richard, it was a great pleasure working with you, and I wish you luck in all your future endeavors,” he said.