How IHG is leveraging technology to help franchise owners

The 2015 IHG Americas Owners Conference kicked off yesterday in San Francisco, focused on the Holiday Inn, Holiday Inn Express, Holiday Inn Resort, Holiday Inn Club Vacations, Staybridge Suites, and Candlewood Suites brands. At the opening General Session, top management from the company spoke to the owners about the future of both the individual brands and the company, especially focused on how technology can help both franchise owners and their guests.

The U.S., IHG CEO for the Americas Elie Maalouf said, is seeing “excellent conditions” in its hotel industry after a very strong summer travel season. But there are still challenges to face, he acknowledged: While Mexico is also seeing a positive travel environment, Canada and South America are not doing as well. Still, Maalouf said, he is optimistic for the immediate future: “When the U.S. hit hard times, it was the growing economies of other countries that helped both the U.S. and global growth,” he said. Today, the U.S. economy can pull more weight. “We’re better together,” he said.

The Holiday Inn Express brand has the top share of hotel development pipeline in world, Maalouf claimed, noting that this covered both overall size and growth. Holiday Inn, meanwhile, is the second-largest brand in the world. Looking ahead, Holiday Inn Club Vacation brands are poised to have 15 resorts by end of 2016.

Technology Updates
This past spring, IHG announced a partnership with travel tech company Amadeus that, EVP & Chief Information Officer Eric Pearson said, will develop a “next-generation” guest reservation system. The new system, he added, will “transform” the industry and do for hotels what Amadeus has done for airlines in the past. “And IHG will have it first,” he said. The program is set to roll out in 2017, with periodic updates.

Technology, Pearson said, plays an increasingly critical role in enabling performance in terms of both supply and demand. For example, online bookings used to be made via the brand website seven days in advance of a guest’s arrival. Today, guests book a room on their phone less than 24 hours before they walk in the door. Of the estimated $5.5 billion IHG will see from direct internet revenue this year, he added, 25 percent will be from bookings made on mobile devices.  

Personalization is also increasingly vital for hotels, he continued. “Consumers will trade privacy for a personalized experience,” he said, predicting that guests will allow front desk managers to see their GPS coordinates from a mobile device (making it easy for staff to greet them by name as they enter) and request specific meals in advance as part of their mobile check-in program.

Oliver Bonke, chief commercial officer for the Americas, noted that smart devices would soon let guests make requests via the brand app that would instantly be added to the appropriate staff member’s workflow, improving overall productivity and giving guests a sense of control over their experience. 

But, he added, these technological advances will mean that individual owners will have to sign on to a single integrated program rather than choosing their own solutions. “Flexibility creates challenges,” he said, noting that franchised IHG hotels use 76 different POS systems in the U.S. alone. “We need one fully integrated solution,” he declared. “The benefits of the new systems— along with better pricing—will provide better value and owner returns.”  New websites for the Holiday Inn and Holiday Inn Express brands would be coming soon, Bonke added. 

Guest satisfaction and the owner-centric model
VP of quality and brand consistency Tim Genovese said that guest satisfaction reports will be adjusted as of January 2016. This is a valuable metric for the company, he noted, as guests who rate a hotel as eight or above on a scale of one to 10 are more likely to return again. Minimum performance levels will be implemented as well, and hotels with better guest scores (known as Elites) will get a better market share. 

IHG is also shifting its franchise model to put the owner of each hotel, rather than the brand, in the center of the process, with a single point of contact to connect IHG, owners and GMs. Specialists of franchise revenue, sales & marketing and operations support will be available to offer advice for owners and managers. “When we introduce something new, we will make sure it’s embedded in all hotels so everyone benefits,” Genovese said. “At the end of the day, why do you buy a franchise? To make money. To do that, you need tools. We have evolved our franchise support to help hotel GMs get things done more effectively.”