IHG Looks To a Bright Future
IHG chief Andy Cosslett likes to dwell on opportunities for the future.
Andy Cosslett doesn’t like to dwell on the past. Rather, the head of IHG prefers to talk about better days ahead and what the 4,500-property brand company can do to increase market share and boost profitability for its franchisees and the hotels it operates.
“We have a lot of momentum now so it’s time to push forward,” Cosslett told a general session audience at last week’s IHG Americas owner/operator conference in Las Vegas. “Our vision is simple and that’s to be one of the best companies in the world, not just the best hotel company.”
Cosslett, other IHG executives and officers of IAHI, the association of IHG owners, were all on the same page as they explained the strategies the company will employ in 2011 to realize Cosslett’s vision. A lot of the focus at the meeting fell on Holiday Inn, the flagship brand that’s in the final stages of a three-year, $1-billion refresh program. The other big news during the event was the signing of two Las Vegas Strip hotels—The Venetian and The Palazzo—to an affiliation agreement with the InterContinental Hotels brand. Beyond these topics, the leaders discussed a number of initiatives aimed at building business and profits for individual properties:
IAHI Chairman Bill DeForrest said Crowne Plaza needs a clearer definition of programming and service.
• According to incoming IAHI Chairman Bill DeForrest, one major priority is a clearer brand definition for Crowne Plaza. “It needs a well-defined personality, and it must be done quickly,” said DeForrest, who’s president and CEO of Lane Hospitality. He believes IHG has made improvements to the upper upscale chain, but “the next step is to get the programming and service delivery right every time, because when you do, the reputation and performance will follow.”
• DeForrest and executives from IHG touted several new service programs the company is rolling out to franchisees. One is the creation of InnSupply by IHG, an electronic product procurement program designed to leverage the collective buying power of the system. DeForrest delivered a strong pitch to franchisees to employ the optional program because “taking 10 or 15 percent out of the cost channel has the same impact as driving top-line performance by 30 percent.”
InnSupply (a name that’s an homage to Holiday Inn’s original purchasing company founded by Kemmons Wilson) allows owners to identify and track their spending patterns while taking advantage of product pricing negotiated with vendors by IHG.
IHG will focus on six areas of top-line performance in the coming year, said CMO Tom Seddon.
• Top-line performance is another priority at IHG. Tom Seddon, IHG’s chief marketing officer and an executive vice president, outlined six areas of sales and marketing on which the company will focus in 2011. In the meetings area, the company is committed to a faster reaction to inquiries from prospects. So far, response times have been cut from an average of three days to one and a half days, but Seddon says the goal is “a clear and consistent approach to meetings, both at the corporate level and at individual hotels.” To help in that effort, the company is partnering with IAHI to hone what Seddon calls “the IHG Way of Sales.”
IHG plans to make additional improvements to its brand websites, which have booked $2.6 billion in business so far this year. Mobile booking is another priority that is paying off: Booking revenues have increased from $250,000 a month in early 2009 to more than $3 million a month currently.
Seddon stressed the need for owners to carefully manage their inventories and rates allotted to online travel agencies (Expedia, Travelocity and others). “The key is balance,” said Seddon. “You can’t ignore the OTAs and their value, but you shouldn’t have too much of your inventory on their shelves. Remember, you have control of the process.”
IHG offers several programs to help owners in their revenue management efforts. One is a software system that Seddon said has helped properties that use it to boost RevPAR by 2.5 points. In another approach, Revenue Manage for Hire, IHG corporate specialists take the rate-setting responsibilities for individual properties.
Finally, Seddon discussed what he called “the 800-pound gorilla” of IHG marketing, the Priority Club Rewards frequent guest initiative. The program, whose members account for about half of the IHG system’s revenues, will be relaunched in 2011 with a new graphics look and greater redemption flexibility for cardholders.Want to use this article? Click here for options!
© 2012 Penton Media Inc.
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