InterContinental Hotels Group

IHG Americas Investors & Leadership Conference kicks off

25 Oct, 2010 By: Kirk Cassels Hotel and Motel Management

Las Vegas— In order for the InterContinental Hotels Group to deliver great hotels that guests love, it must focus on people, guest experience, responsible business and financial returns, according to IHG President of the Americas Jim Abrahamson. Touting such successes as an 8 percent increase in RevPAR across Holiday Inn, as well as a 7 percent increase in RevPAR in Holiday Inn Express, through the third quarter due to relaunch of the brand, Abrahamson was as quick to be cautious as he was laudatory.

"This is not a time to celebrate," Abrahamson said. "RevPAR may be improving but that doesn't mean recovery is fully here. Meanwhile, the government is looking for new ways to tax and regulate us. We need to focus on preference, performance and profitability. We need to be driven, distinctive and all about people."

Abrahamson kicked off the opening session of the IHG Americas Investors & Leadership Conference shortly after four guests shared their experiences in staying at any of the company's brands (in total, the guests spent 600 nights at IHG hotels in the past year). From the couple staying at Staybridge Suites after losing their house, to a grandfather taking a train journey to New Orleans with his son just after Mardi Gras concluded, the exemplary message was clear: Guest satisfaction leads to great business.

But at both the local and international level, there is much to be done in order to continuously maintain success in guest approval and loyalty. For instance, Abrahamson announced that IHG has doubled its revenue management program, and that the company has increased its field support teams while the IHG's competitors have cut back. In addition, IHG is rolling out some new operations initiatives to reinforce and reinvigorate its brands, primarily focusing on investment in its staff, talent and service.

For starters, IHG is introducing InnSupply, a management system aimed at leveraging buying power while reducing costs and improving quality. As InnSupply improves efficiency across the board, IHG will continue to focus on using new tools to attract and retain the best employees by hiring, training, improving and recognizing its outstanding workers. "Employee satisfaction leads to guest satisfaction, which leads to profit," Abrahamson said, noting that IHG trained more than 19,000 employees this year within more than 1,000 program sessions. 

In addition to doing the right things for its employees, Abrahamson stressed the importance of IHG practicing responsible business through the new Green Engage program, which will bolster sustainability and eco-friendly operations at the company's brands. "It's about more than doing the right thing," he said. "It's about increasing margins, driving sales and reducing costs."

Following up on Abrahamson's message about service, Mark Carrier, senior vice president of the B. F. Saul Company Hotel Division and chairman of IAHI, the owners' association of IHG, quoted a Latin adage—ubi concordia, ibi victoria—reminding that audience that "where there's unity, there's victory." Carrier reflected on the success of IHG's "Celebrate Success" workshops when commending the general managers in the room for setting an example that resonates throughout the thousands of IHG hotels employees, noting that "love comes alive through you and when our guest love us, we succeed."

Touching on Abrahamson's message about what IHG needs to do to keep ahead, Bill Deforrest, CEO of Lane Hospitality and incoming 2011 chairman of IAHI, reiterated the importance of focusing on performance and profitable market share growth. Deforrest referenced the new InnSupply program when stating that taking 10 to 15 percent out of costs can be the same as a growing top line of 30 percent. 

"As group business appears to be returning, all indications are that RevPAR will continue to grow," Deforrest said. "So we must focus on market share. We've gone from survival mode in 2009 to revival in 2010. 2011 must be thrive mode."

A part of thriving, according to Deforrest, is strengthening value. "We need to put the 'full' back in full service," he said. "We want our restaurants, lounges and media rooms to be full. We want to make every meal fun. We must create a brand premium that is a unique selling point."

Other notes from the opening session

*    Candlewood Suites is experiencing the largest pipeline and the largest growth in the extended stay segment, rolling on recent property openings in San Antonio and Indianapolis.

*    In addition to successful openings of InterContinental Hotels in New York City and Mendoza, Argentina, the brand will open at least eight properties in China by the end of next year.

*    In New York City, 23 IHG hotels are all new or relaunched and have a RevPAR of $138 year-to-date.

*    Crowne Plaza is experiencing the biggest pipeline in the upper scale segment and is "the brand to watch," according to Abrahamson, as it will evolve positioning in 2011.

*    Hotel Indigo, referred to as the "fun" brand by Abrahamson, will open its first international property in Shanghai next year, and there are plans for other properties to open in London, Madrid, Taipei, Hong Kong and elsewhere. 

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