Case Study 11.1 Intercontinental Hotel Group (IHG) PDF

## Service Quality in Leisure, Events, Tourism and Sport, 2ND EDITION ### Case Study 11.1 Intercontinental Hotel Group (IHG) #### Introduction IHG became a standalone company in 2003 and is now one of the largest hotel companies in the world, with nine brands comprising about 4000 hotels and 345,...

## Service Quality in Leisure, Events, Tourism and Sport, 2ND EDITION ### Case Study 11.1 Intercontinental Hotel Group (IHG) #### Introduction IHG became a standalone company in 2003 and is now one of the largest hotel companies in the world, with nine brands comprising about 4000 hotels and 345,000 staff across almost 100 countries. However, it is significant to note that IHG owns very few of those hotels, although its own history goes back over 60 years and some of the brands also have a rich heritage. In fact IHG began in the 1950s with the founding of the Holiday Inn brand, which is still one of the core brands in the IHG group. IHG - instead of owning hotels - is an overall brand name, a franchise with the benefits of central marketing, operational and booking systems, but also with the challenge of ensuring and assuring quality across the brands and the individual hotels. We have focused on IHG because it ties in with many of the messages and key points highlighted in Chapter 11 and throughout the book. Indeed, the introduction to the chapter points to the need for clear goals and objectives and an equally clear and strong vision to engage guests, staff and other stakeholders. In identifying their priorities in the last 3 years, IHG have focused on 'those things that matter the most... they are aligned with brands, people, delivery and responsible business'. This seems to fit quite comfortably with the perspectives outlined in Chapter 11, particularly the first three - the Leaders, Stakeholders' and Operational Perspectives - and also has a resonance with our fourth perspective, Research, because of their understanding of the external environment, their analysis of the market and their use of informed consultants. In focusing on the three themes, they have identified a series of programmes for achieving the associated goals and targets, and this case study will highlight a number of these as we match the themes with the perspectives of Chapter 11. #### Brands IHG's approach links closely with the points made in Chapter 11 about core and shared values as the underpinning to the Leaders' Perspective. The IHG philosophy was manifested in 2012 by the creation of its 'BrandHearted' approach in which the brands were paramount and a number of programmes and priorities were identified to underpin this approach. This dovetails with the first perspective in Chapter 11, the Leaders' Perspective, in which the need for clear core values is emphasized. According to Richard Solomon, Chief Executive in 2014, 'We know that well-managed brand standards are at the heart of how to create preferred brands. They drive quality and consistency across our brands, giving guests the same great experience wherever and whenever they stay with us. In recent years IHG has won over 400 awards, including: the JD Power and Associates 'Highest in Guest Satisfaction' for the Holiday Inn brand; the 'Best Business The Freshen Up phase focused on fixing the basics and raising brand quality and consistency, which included a new identity and global service training programme; Celebration of 60 years for Holiday Inn, building on the momentum this created and delivering a new approach to managing their brands that would give the Holiday Inn family greater distinction; Consolidating two new brands EVEN Hotels and HUALUXE Hotels & Resorts; Developing their approach to brand standards so they can consistently deliver great brand experiences; Continuing to develop their consumer insights in order to understand better their guests' needs; Introducing a General Manager training programme; Their Celebrate Service Week; Receiving high levels of responses to their Engagement Survey. #### People This aspect illustrates the points we have made in Chapter 11 about the Multidimensional Stakeholders' Perspective and how any approach to quality requires both customer and employee engagement and an appropriate service culture. IHG set out to 'equip our people with what they need to build a 'BrandHearted' culture in our hotels'. They worked with their hotel owners to develop a new General Manager Training Scheme and to offer new leadership competencies and an approach to project management (the IHG Way of Project Delivery), which helped their leaders gain a clearer understanding of what is expected from them in operational contexts. Chapter 7 emphasized the importance of employee engagement and the emotional labour of staff, and IHG appears to recognize this through their engagement surveys of staff (94% response in 2013) and their Celebrate Service Week Scheme, and they receive external accreditation on a number of 'Best Companies to Work For' lists. The priorities within their strategic approach focused on the following: Building a more effective organization. They were concerned with how to support their teams in being even more effective and efficient through having the right structures, accountability, capabilities and ways of working, critical for delivering high performance as we have seen in the Stakeholders' Perspective in Chapter 11 and other chapters (notably 3, 7 and 8). Creating a high performance culture. They have set out to achieve this through a better linking of performance management and reward, and aligning it to company targets. #### Delivery This aspect fits closely with the Operational Perspective in Chapter 11, as well as facets of Chapters 1, 5, 6 and 8, and is concerned with how IHG can be seen to be consistent, trusted and reliable in all that it does. Win with channels and systems. Almost 70% of total room revenues in 2014 were booked through IHG's channels or direct with the hotels by the 77 million Rewards Club members. Since the launching of the Rewards Club in July 2013, there has been a 10% increase in awareness of IHG as a family of brands. Direct bookings drive the highest rate premium and revenue margin per room night for owners, and the focus on driving system delivery through industry-leading web and mobile channels supports the points made in Chapters 1 and 5 about the importance of technology to service quality and the guest experience. Driving operational excellence. Chapter 8 in particular, and the message in Chapter 11, highlighted the importance to service quality of various tools, systems and models and IHG are also an example of good practice in this respect through: IHG Way of Project Delivery and Hotel Ready to give their corporate project managers best-practice tools and processes for delivering their initiatives; New Merlin is a faster, simpler and more social intranet to provide all the tools and information to perform at their best; Hotel Solutions is the home for Merlin for the hundreds of best-practice tools for improving hotel performance, as well as a community of ideas and exchange of information from more than 4000 hotels; Communications Standards incorporate a set of guidelines, tools and templates to help all hotels deliver simple, engaging and consistent communications. #### Source Your Guide to 2014: A message from Richard Solomons, Chief Executive of IHG The image appears to be of a page from a book with a picture at the bottom of the page. The picture is of a beautiful resort, possibly in the tropics, with palm trees, beach and an infinity pool. The caption for the picture states that the photograph is of The Danang Sun Peninsular Resort, Vietnam.