Intercontinental hotels group analysis

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Intercontinental Hotel Groups is an international hotel company which has a goal that it definitely aims at achieving is that to create Wonderful hotels that the Friends love.

Intercontinental hotels group which is also known in short contact form as IHG has extra guest rooms available under their banner than any other hotel group. IHG is continuing to grow from a very small enterprise to a massive company handling various top quality hotel homes under its wings. IHG has a lot more than 650.000 areas in over 4,400 accommodations across 100 countries the full total stays that are done by guest in the IHG houses is over 130 million each year. 1(IHG website)

With a clear view of what are its priorities, IHG’s main goal is creating Great Accommodations Guests Love with everything done centered on the guest & the personnel. It operates hotels in three various ways as a franchisor, a supervisor and on an owned and leased basis. It also operates seven leading resort brands InterContinental, Crowne Plaza, Resort Indigo, Holiday Inn, Holiday break Inn Express, Staybridge Suites and Candlewood Suites. It also manages the world’s major hotel loyalty programme in the industry referred to as the, Priority Club Rewards, which has 48 million members worldwide. IHG can be molded around these three areas: The Americas; European countries, Middle East and Africa; and Asia Pacific. 2(IHG Annual Report)

1 Strategic Corporate Creation History of IHG:

The formation of IHG has gone through various phases as any other organization would have gone through that was taken efficiently by William Bass who possessed a brewery in 1777 & slowly but little by little entered in the resort sector by acquisition of a breweries just like the Mitchell’s & Butlers in the 1960’s which grew considerably large which when the government realized issued orders in legislations that breweries cannot hang on a big number of pubs which then made Bass reduce the pubs it owned significantly which triggered plenty of cash flow which offered Bass an capability to develop a global hotel business which started with the acquisitions of a few hotel groups like Vacation Inn in 1988 & likewise launched the Holiday Inn Express to become complementary to the Holiday Inn brand, hand and hand Bass grew his pub organization side by side & acquired The Harvester Chain of Eating places in 1994 & likewise launched its new brand of hotels known as Crown Plaza Resorts & resorts climbing up to the upscale resort market.

In 1996 bass tried out to obtain ½ of Carlsberg Tetley which once again was hampered by the UK government which helps Bass another on line & focus on the resorts & pubs divisions departing breweries aside.

A year later in 1997 the hotel business focus becomes truly brand focused because Bass had already sold a few north American midscale hotels but held back again to the brand of the resorts through franchising agreements. Likewise that season Bass created & launched a fresh brand of hotels referred to as the Staybridge Suites which was targeted at the upscale hotel market. Staybridge suites became the fastest brand in this upscale segment to reach 50 units in America.

In 1998 Bass acquired the intercontinental hotel business, adding increasing its fold another upscale manufacturer to its resort portfolio. It had been another significant acquisition to cost saving & synergies to the fold of hotel portfolio work by Bass.

In 1999 Bass once again acquired 550 handpicked large potential sites in UK & also a strong 3500 good pub estate from allied domecq.

In 2000 Bass went on to acquire the Southern Pacific Corporation (SPHC) in Australia, which guaranteed Bass’s job as the leading hotel enterprise in Asia Pacific. Later in the entire year Bass distributed of his Bass breweries for 2.3 billion pounds. This is the final step by Bass to completely focusing on being the foreign hospitality retailer from being a domestic brewer – an activity which took an extended period of 10 years to full. Over the time period Bass sold off name of bass and altered the brand to Six Continents PLC. a brand which it bettered into to reflect the global spread of the group’s organization.

In the month of February 2001 Six Continents distributed 988 of its smaller sized unbranded pubs for 625million pounds, which additionally funded the buying of the European Posthouse chain of hotels for 810million pounds. The acquisition of the company which had strategically put hotels could be changed into Holiday Inn concentrating the vacation Inn brand in UK & Europe. Afterwards that year it went on to acquire Intercontinental Hong Kong for 241 Million pounds strengthening its posture in the Chinese & Asia Pacific markets.

On 1st October 2002 Six Continents Plc released its separation of the group’s hotel & carbonated drinks businesses (to be named Inter Continental Group Plc) from the retail business (to be named Mitchells & Butlers Plc) of which 700 million Pounds of the proceedings returned capital to shareholders. The whole method of separation was accomplished on the 15th of April 2003. Intercontinental Accommodations Group Plc (IHG) after that is a definite, discrete company, listed in the united kingdom & US stock markets.

In July 2003 IHG sold Staybridge Suites to Hospitality Houses Trust (HPT) & entered right into a 20year management arrangement. Later in the year they added a midscale prolonged stay company Candlewood Suites to its portfolio.

In the entire year 2004 IHG announced the introduction of a new brand, hotel Indigo which centered on providing affordable boutique accommodation. In the same month, the group adopted innovative standards for advertising and re-selling hotel rooms for guest stay through on line travel companies.

Following the victory of the Up Scale market brand of Staybridge Suites North America IHG launched its expansion of Staybridge suites to UK in April2005. As well in 2005 IHG proceeded to go ahead & removed its carbonated drinks 100% holdings in Britvic Plc. With this disposal IHG became a firm with a pure hotel focus.

In 2006 IHG proceeded to go ahead & signed a jv with All Nippon Airways (ANA), resulting the following projects – IHG ANA resorts group Japan – would be the largest international resort operator in Japan, the world’s second largest hotel market. The deal saw the launch of three new brands designed for Japan. ANA-IHG, ANA-Crowne Plaza & ANA Holiday Inn.

In the year 2007 IHG announces a worldwide relaunch of the vacation Inn brand spouse and children, comprising Holiday Inn, Express by Holiday Inn & Vacation Inn Express. The re release was finished with the intention of giving it a refreshed & modern day brand image. All of the hotels were supposed to have completed the re launch this year 2010 with the very first re launch occurring in 2008.

In the entire year 2008 after the re launches of Holiday break Inn occurring Staybridge Suites extended its brand even more in UK & the first of all Hotel Indigo opened up in London.

In 2009 the1500th hotel was relaunched over the 40% of Trip Inn & Holiday Inn Express.

Strategy applied from the learn to the current time frame:

Bass the key brain behind the whole formation of the Intercontinental Hotel Group has played a significant role in the sluggish but steady growth of this company from a small company to an internationally known company. Bass is continuing to grow this large group through the basis of trial & error circular which he has experimented in various concepts of owning & afterward selling in that case franchising & finally managing homes. Bass has being following linear style of growth through several acquisitions. InterContinental Accommodations Group PLC was shaped by the separation of Six Continents PLC (previously Bass PLC) on 15 April 2003. The cafe and pubs portion of Six Continents became Mitchells & Butlers plc.

However, IHG’s makes trace their history again much further than 2003. Our Holiday Inn brand, one of many worlds most recognized was created in the 1950s by Kemmons Wilson in america. InterContinental, another of our makes was created by Pan Am in the 1940s, when hotels were built in a lot of Pan Am’s destinations. 3(

Over the past few years, Intercontinental resorts group has taken care of itself strategically to be more efficient and successful and make full make use of their global position. A predominantly franchised and maintained, fee-based business was the primary focus of IHG.

The approach that IHG followed made their income stream predictable with a strong cash technology which allowed it to keep in growth because almost all their new hotels had been funded by third-party investment.

IHG went in advance and relaunched Getaway Inn in 2007 – and although the unexpected economic circumstances that arrived by IHG throughout that time period, it continued and received on with the $1 billion program because of the belief of the heads of IHG that it had been exactly the right time to just do it with the relaunches. The relaunch continued to setting up back people’s perceptions of Getaway Inn. The guest wanting to try Getaway Inn with IHG with its benefit they’re giving the Company once down another try to liking and accepting what they located. Guest satisfaction was going up and owners could start to see the Revenue per room’s out perform. "These economical circumstances might seem just like a great motive to shy away from making such big improvements, but time will show that it is both a very opportune and very effective initiative for this, our biggest brand", as quoted by the CEO of IHG Mr. Andrew Cosslett.


Current strategy used by Intercontinental Hotels Group:

Bass the primary brain behind the complete formation of the Intercontinental Resort Group has played a significant role in the slow but steady growth of this company from a little company to a worldwide known company which presently has an operating strength of 4400 resorts with 130 million guests visiting a season and under its umbrella offers and well known and reputed hotel makes covering all of the major segments of the marketplace, also have a reservations system which involves 10 call centers in 29 languages it has also strived to be the most notable leader available in the market & has been able to position itself through its approach of growing & performing retailing in hotel sector have already been able to standing itself among the 6 most significant hotel market, a lot more than any other company.

Intercontinental hotel group has also been able to help make the no.1 website for its guests & investors in 13 different languages. They also have a global sales team of 8000 to perform the product sales of the hotels located all over the 100 countries they have their presence.

Intercontinental hotels also offers a loyalty programme that provides priority club rewards which are largest in the industry for over 48milllion of the guests which has been planned consequently strategically that .

It has been mentioned on IHG’s webpage that "We’ve moved from investing seriously in hotel properties to come back to your roots as a resort franchise and management organization with just a few owned assets. This transformation of focus has led to an industry-leading asset sales programme. Since 2003 we’ve sold £2.9 billion worthy of of property. A number of these hotels possess remained under our brands with administration or franchise contracts, thus creating a future income stream for IHG" 4 (

Over recent months, IHG’s continued expansion in new areas has helped to put off a number of the revenue lost from Earnings per bedroom declines. Driving in coming revenue into the hotels have been a priority and its ‘system’ is the key to providing this. Their system consists of top notch reservations centre’s, websites, global sales teams and Priority Club Rewards loyalty scheme and delivered

68 per cent of rooms revenue to the hotels in 2009 2009. Reducing the entire cost foundation of IHG was crucial to managing through the downturn. IHG had been reducing costs to perform the properties better but with the economic downturn they steeped up the tempo of change that had been gradually run. While they were reducing costs by taking better good thing about their way of procedure as well their pass on being worldwide, this also forced them to make reductions in the number of staff which unfortunately impacted jobs of IHG staff all over in the majority of properties. All these actions were taken in 2009 to lessen costs, although it was an extremely difficult amount of the economic downturn; it allowed IHG to save a lot of cash and continue its investments in those ideas that attract guests to come to its hotels and revenues to the owners. The great working romantic relationship that IHG shares with the owners of their houses, both straight and through the IAHI, which is certainly IHG’s Owners’ Association, in addition has been main contributor to the swift recovery & likewise to the massive expansion taking place. By working alongside with the resort owners, IHG’s in a position to focus on the guest knowledge and on delivering Great Hotels Guests Love. 5 (



The 48 million customers of IHG’s Priority Club Rewards programme remained devoted though the economic downturn and had been most supportive through the difficult times. Not merely did these guests stick with IHG more regularly, they spent more if they does. A guest’s loyalty can’t ever be taken for granted – it really is something that may take years to achieve and seconds to reduce. So IHG had ensured they have continued to include advantages to the loyalty programme through the downturn, and built membership of it even more worthwhile. In ’09 2009 it enrolled six million new members into the programme – that’s a significant number of individuals whose first choice will now be to stay in one of IHG’s hotels.

IHG’s future progress will be achieved predominantly through franchising and handling rather than owning hotels which will drive down costs & increase earnings by the fact that the expenditure in the hotels will be done by third celebrations. Approximately 641,000 bedrooms operating beneath the Group brands are franchised or handled and 5,800 rooms are owned and leased.

The franchised and managed fee-based model is of interest because it allows the Group to attain its goals with limited capital investment at an accelerated speed. A further advantage may be the reduced volatility of the fee-based income stream, weighed against ownership of assets.

A key characteristic of the franchised and managed business is that it generates more cash than is required for investment in the business, with a high come back on capital employed. Presently 87% of continuing revenue before regional and central overheads, exceptional items, interest and tax is derived from franchised and managed functions.

The Current Strategies followed by IHG Hotels Group:

• 90% of discounts signed in scale market segments and key gateway locations;

• 10 signings of Resort Indigo and Staybridge Suites beyond North America;

• 439 hotels opened globally.

• Improved proportion of revenue delivery through IHG global reservations channels and PCR members immediate by four percentage things to an average 68% of global hotel rooms revenue in 2009

• Major procurement cost savings made;

• Increased use of offshore transaction processing;

• Technology infrastructure produced to support owner administration and loyalty marketing.

•Continuing to cascade Great Hotels Guests Love in hotels and corporate offices;

•Getting together with ongoing resourcing requirements to complement hotel growth in level markets;

• Managing worker engagement;

• Continued give attention to attracting and retaining talent. 1,697 relaunched Trip Inn and Vacation Inn Express hotels wide open around the globe;

• Industry-leading Priority Club Rewards (PCR) loyalty program with 48 million participants, contributing $5.6bn of global system rooms revenue

•Green Engage sustainability management system created (patent pending); rolled out to over 900 accommodations by 31 December 2009;

•Extensive consumer exploration undertaken to quantify ‘green’ opportunity with consumers; and

(IHG annual record)

3 Future ways of be employed by Intercontinental Hotels Group:

"IHG’s prime focus should be on growing more quickly by making its brands the first choice for both friends and hotel owners. We will do this by building the resort industry’s strongest operating-system, focused on the largest marketplaces and segments where level really counts." 5 (

During these tough monetary times, IHG had used decisive actions both to strengthen the proficiency of its businesses and keep their course with its growth strategy. IHG should continue steadily to spend money on its staff, its devices and its brands, while moving possibly closer in working human relationships with its hotel owners and partners. "With momentum and a united, winning spirit inside the business, IHG is well put to make the the majority of the upturn as it pertains". As quoted by the CEO of IHG Mr. Andrew Cosslett.

IHG’s Ambition

IHG should concentrate on its core reason for creating Great Hotels Guests Take pleasure in as the moto is definitely, which is a growing crave to provide among other key efficiency indicators (KPIs), carefully enduring best quartile shareholders returns when measured against a broad global resort peer group. For the three-year amount of 2007 to 2009, IHG was fourth among its peers on Total Shareholder Come back (TSR) and really should always remain concentrated and make an effort to come to the very first posture. Measuring IHG against a collection of specific KPIs targeted at delivering its core purpose, cascaded to the hotel level. Successful efficiency against various combinations of the metrics would cause higher profitability..

IHG’s Future Strategy:

IHG’s technique has seen significant expansion through 2009 as it moved to make its core purpose possible, despite challenging economical circumstances. In 2009 2009, IHG took a difficult look at its businesses and capabilities to concentrate on what really matters most to provide Great Hotels Guests Love. It has supported this up with a significant work to align its personnel and measure the most crucial drivers, resulting in a clear, target-based program within the accommodations to motivate groups and guide behaviors’.

IHG’s strategy encompasses two key elements:

Where does it tend to compete; and

How will it earn where it competes?

The Group’s underlying ‘Where’ technique is usually that IHG would expand a portfolio of differentiated hospitality makes in go for strategic countries and global major cities to maximise the scale gain. The ‘How’ aspect of our strategy flows from our primary purpose and our study at the hotel level as to what really makes a difference for guests. In support of this overall approach there are key priorities – like ‘Where we contend’ and ‘How we succeed’. To greatly help IHG’s hotels and corporate staff measure their work in attaining Great Hotels Guests Take pleasure in, IHG provides very clear metrics aligned with the four ‘How we get’ priorities against which progress is certainly gauged. The Group approach also results in specific regional objectives and priorities. .

IHG’s Delivery Program:C:\Users\d\Desktop\Untitled.png

Driving demand

IHG’s operating system comprises of all the things we do to operate a vehicle demand for our brands. This includes our marketing and advertising campaigns, our 10 global call up centres, 13 local terminology websites, an 8,000-strong sales team, Priority Club Rewards – the world’s major hotel loyalty scheme which has 48 million customers – and all of the positive aspects that IHG’s global hotel distribution and scale brings to brand awareness.

Hotel distribution

IHG has over 4,400 hotels in over 100 countries worldwide. Our brands are in the very best 3 in 7 of the 12 major hotel markets on the globe.

When persons travel, they search for familiar brands they know from your home, increasing the demand for resorts that work under our brands around the world.

Advertising and marketing

Each time, IHG’s franchisees pay out a fee into a central fund. This fund is utilized with the person for marketing and offers to drive guest demand for IHG’s brands. Company sponsorships, tv set and print promotional initiatives and public relations activity across the globe are all ways that the fund may be used.

Priority Club Rewards

IHG’s Priority Club Benefits is the greatest hotel loyalty scheme on the globe, with 48 million members.

Web presence

The 13 local dialect websites dominate 7.4 million bookings a year – they’re a store window for the hotels around the world under IHG,s banner, 365 days a season. is among the industry’s virtually all visited websites, notching up 75 million site visits in 2005. The websites operate in the following languages: Arabic, Chinese, Dutch, English, French, German, Hebrew, Italian, Japanese, Korean, Portuguese and Spanish.

Reservation system

IHG,s 10 global reservation offices can be found to take resort bookings from guests 24 hours a day in 26 languages incorporating Arabic, Cantonese, Dutch, English, French, German, Hindi, Italian, Japanese, Mandarin, Portuguese, Spanish, Tagalog and Thai. They handle 700 transactions per minute.

Sales force

IHG have a global sales force of more than 8,000 professionals throughout the world, talking about and selling the booking of resorts under our makes to individuals and companies.

Considering the future technique which can be goin to be utilized to the growth achievement of IHG are as follows:

Consumer understanding:

As one of many world’s largest hotel groups, IHG has gained priceless insights into where and how consumers seek hotel data and produce reservations – across various channels and from various local, regional and global options. These details has shaped just how we engage with our customers and enabled us to drive up returns for owners.

Global Reservations System

All IHG hotels benefit from the world’s most advanced reservation system – Holidex In addition.The system links a lot more than 230,000 terminals worldwide and processes over 130 million stays a year – that’s about 700 transactions per second. That is serviced by our 12 all over the world reservation centres which receive up to 14 million calls annually in 15 different languages.

Global Distribution Systems (GDS)

Our reservation systems likewise link with all the current main GDS, the channel of preference for travel pros and large corporate buyers. Thus giving us global night and day access to the travel trade.

IHG online

Our websites continue being a fast-developing reservation channel. They give a comprehensive, customer-friendly and safe and sound booking service in 13 languages and offer a low cost of sale. We receive a lot more than 5 million unique net visitors per month and also take advantage of the lowest clicks-to-book rate in the industry.

Worldwide sales

IHG’s worldwide sales force is more than 8,000 strong. Along with producing new revenue, the group also manages important corporate and agent accounts and local hotel product sales support to maximise revenue and keep IHG resorts top of mind. 6 (

Some Into the future Milestones to be achieved:

• Continue worldwide roll-out of Staybridge Suites and Hotel Indigo;

• Execute growth approaches in agreed scale market segments;

• Continue steadily to leverage level and build upgraded strategic position during the economic downturn

Increase global sales team effectiveness;

• Continue even more procurement programmes to identify efficiencies;

• Begin migration to next-generation income management IT systems;

• Continue give attention to owned and handled estate margins and go back on capital employed

(ROCE), especially in our key InterContinental assets.

• Drive greater productivity and simpleness through better make use of technology;

• Concentrate on developing skills to support the key goals for responsible organization, guest experience and economical returns.

•Complete Trip Inn repositioning roll-out;

• Continue steadily to simplify brand standards method to improve owner returns without impairing guest encounter;

• Continue steadily to enhance experience for PCR people in resorts and across global reservations

channels; increase IHG organization from PCR members

•Continue to roll out the Green Engage sustainability supervision program to 100% of our owned and

managed hotels and expand into the franchised estate in every three regions; and

• Concentrate on innovation within innovative and existing brands to provide valued ‘green’ related hotels

and services to guests.

(IHG annual survey)









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