Intercontinental Hotels Group
InterContinental Hotels & Resorts – Brand Overview
InterContinental Hotels & Resorts is a luxury brand, which offers upscale hotel services to its highly valuable, premium, and high-end customers. It has more than 17,109 room in 200 hotels altogether in 75 countries across the globe. InterContinental Hotels & Resorts are pioneers in the luxury hotel industry. The parent company of Intercontinental Hotels & Resorts is InterContinental Hotels Group commonly referred as (IHG). Apparently, with almost 710,000 room in 4840 properties of resorts and hotels in across 100 countries, IHG is evidently marking its dominion in the hospitality industry while upholding the title of being world’s third largest hotel chain in the world after Choice Hotels International, Inc., which has 6379 properties and Wyndham Hotel Group with 7645 properties. IHG is one of the oldest and most luxury resort and hotel brand in the world.
InterContinental began in 1946 when Pan American Airlines realized that there was a lack of quality hotels in many of its destinations. The parent company i.e. InterContinental Hotels Group (IHG) is a multinational company, which envelops 9 hotel brands including Crowne Plaza, Hotel Indigo, InterContinental, Holiday Inn, HUALUXE™ Hotels and Resorts, EVEN™, Holiday Inn Express, Candlewood Suites and Staybridge Suites and Hotels . IHG is the largest hotel company, which is headquartered in Windsor Denham -London (UK).
IHG has a listing on the London Stock Exchange. While following the mission of IHG ‘to become world’s greatest company by creating magnificent hotels that guests love’, IHG brand has created a glorious history of 70 years. IHG has designed a set of values that are known as “The Winning Ways”, which offers a roadmap and long-term vision to IHG and all its associated business projects to reach organizational objectives and goals. InterContinental was awarded the prestigious title of ‘World’s Leading Hotel Brand’ at the World Travel Awards 2014 for the sixth consecutive year, and also the title of ‘Best Hotel Brand Worldwide’ by the Business Traveler Middle East Awards 2015. IHG also succeeds in having world’s largest and first hotel loyalty program i.e. Priority Club® Rewards that currently has more than 69 million members internationally (Intercontinental Hotels Group, 2014).
InterContinental Brand Structure
IHG maintains centralized brand structure for each of its 9 hotel brands. Likewise, InterContinental Hotels & Resorts follows a centralized brand structure and approval process for its 180 hotels. The brand structure of Intercontinental Hotels & Resorts looks something like the figure below. This illustrates that with the help of this type of structure, each of these business specialists i.e. Marketing Asset Managers, Approval Authority, Business Affairs Managers, and Brand Managers interact with each other to optimize the management of their brand and to develop the superior brand image. The role and responsibilities of each of this position are described below;
Brand Managers: Brand managers at Intercontinental are responsible for developing brand objectives aligned with the core business goals while developing strategic business plans to accomplish them. A significant part of their job is to effectively utilize their available resources. For this purpose, they interact with marketing asset management to identify the available resources for their goal accomplishment.
Marketing Asset Manager: Marketing Asset Managers are responsible for determining those available organizational monetary and non-monetary resources that can best support the brand management department in their goal attainment. While compiling the list of the resources, they then lay out a detailed plan in order to leverage these assets, as well as, briefing the Business Affairs Management over the deal terms of every resource to be used (Boella & Goss-Turner, 2013).
Business Affairs: Business Affair managers are responsible for negotiating all the deal terms to gain in-depth knowledge about the current business situation and industry settings. Once they understand and negotiate the terms, they develop cost proforma that is then presented to designated authority of approval within the organization, which further decide that on what terms the resources will be sanctioned for the activities of the brand management.
Approval Authority: They are responsible for setting guidelines and standards for all the resource deals. After receiving the briefing from business affairs, they review the sheet of every deal-term to make sure that they are in compliance with organizational standards and guidelines. If they have any concern they ask business affair management to address them proficiently and as soon as they get resolved, they authorize then to acquire or sanction resource within a defined brand budget and monetary constraints.
This brand structure is optimal for Intercontinental hotel as it allows it to attain reasonable marketing budget, understanding the market situations, underrating existing competitiveness of the brand, and identifying organization’s core competencies and strengths (Boella & Goss-Turner, 2013).
InterContinental Central Reservation System
Central Reservation System (CRS) is an electronic system that is used by InterContinental for data storage and retrieval while conducting their everyday transactions related to their hotel management services. The Central Reservation System have the task of product and tariff representation, as well as, the reservation of travel services to all the system participants. To this end, the systems feature communication hubs for global connection to the system users. In addition, modern user interfaces facilitate the use of the systems. Although CRS was initially designed and utilized by airlines; however, currently there is a wide range of system that has been extended to numerous industries including hotel, air travel, and car rental activities.
This system allows users and management from all over the world to manage booking rooms in the hotel along with reserving services and tours. It also facilitates reservation and sales team in InterContinental to access the accommodation, room availability, and room rate from the central reservation office. InterContinental’s CRS is hosted by a cloud, which aid users to access the information regarding hotel reservation even at the time when they are traveling (Walker & Walker, 2012).
The CRS system used by InterContinental is known as Amadeus. Amadeus is a management company for the distribution and sale of travel services. Technically, InterContinental realizes the use of Amadeus - CRS by connecting the data center of the InterContinental provider to many different service providers, on the respective requests of travel agents and individual users that will be forwarded directly to InterContinental, which is the service provider (Kim, 2015). The entries are made using standardized and product-specific custom masks, which apply to service providers i.e. InterContinental; whereby, the training required for the hotel sales agents will be reduced to a minimum. The Amadeus - CRS is also responsible for billing the cost of managing and booking costs if necessary, as well as, the payment of incentives, i.e. remuneration of the InterContinental for the travel agencies. The CRS also provide evaluations for the back office systems of InterContinental and offer additional products to support sales processes (Mok et.al, 2013).
InterContinental Revenue Management Systems
The Revenue Management System is a computerized instruments that facilitate simultaneous and dynamic processes, mostly price and capacity control. InterContinental uses revenue management system for managing demand by capacity availability and rates. Revenue management systems are used by InterContinental with the aim of maximizing the total revenue of the company by meeting the demand with the highest willingness to pay. The Revenue Management System of InterContinental consists of nine elements which that are discussed below:
Market segmentation & Price Differentiation: The overall market is divided into homogeneous market segments with different willingness to pay. The individual market segments are allocated to different booking classes with different prices.
Demand Management Over Time: Usually in the form of leisure travelers delivers low-demand (e.g. very early stage, and high demand) e.g. in the form of business travelers. To prevent that quota be booked with lower demand and quality demand is displaced, quotas for high demand are blocked at an early stage (Kimes, 2016).
Overbooking: Overbooking is aimed at wholly owned capacity utilization. In the absence of overbooking incur empty rooms, because short-term cancellations, changes and “No Shows” can no longer compensate for the short term. ‘No Shows’ denote the phenomenon that customer do not appear after booking.
Education & Individual Control of Booking Classes: InterContinental divide its rooms into Business Suites, Luxury Suits, and Deluxe. These have different quota sizes and prices that are individually controlled dynamically and are managed according to the market conditions.
Nesting: The rooms are nested. High-quality rooms automatically access quotas on the low fare classes, the reverse is not possible.
Traffic Flow-Related Booking Class Control: The room availability depends on whether consumers belong to a high value and traffic flow
Sale Origin Related Booking Class Control: The availability of rooms depends on in which sales region the highest rates are generated.
Forecasting Models: Demand curves and no-show rates are predicted to control current posting profiles and maximizing revenue.
Information Technology Systems: The high number of control decisions and required data of revenue management systems requires the use of high-performance information technology systems (Kimes, 2016).
References
Boella, M., & Goss-Turner, S. (2013). Human Resource Management in the Hospitality Industry: A Guide to Best Practice. Routledge. Retrieved From http://books.google.com/books?hl=en&lr=&id=5GltPgwxaB8C&oi=fnd&pg=PR3&dq=Hospitality+Industry+2012&ots=i4VNCmkPux&sig=pf593hahwCSJy6R58yjR9fzYaeM Retrieved on August 01, 2016
Intercontinental Hotels Group. Official Website (2014) Data Retrieved From http://www.intercontinental.com/hotels/gb/en/reservation?qAdlt=1&qBrs=6c.hi.ex.rs.ic.cp.in.sb.cw.cv&qChld=0&qFRA=1&qGRM=0&qPSt=0&qRRSrt=rt&qRef=df&qRms=1&qRpn=1&qRpp=10&qSHp=1&qSmP=3&qSrt=sBR&qWch=0&srb_u=1&icdv=99615773&sicreative=25166534932&sicontent=0&siclientid=2051&sitrackingid=641253479&dp=true&icdv=99615773 on August 01, 2016
Kim, T. (2015). Tourism Information Reservation System considering the Security and Efficiency. Journal of the Korea Society of Digital Industry and Information Management, 11(2), 67-72. Retrieved on August 01, 2016
Kimes, S. E. (2016). The evolution of hotel revenue management. Journal of Revenue and Pricing Management, 15(3-4), 247-251. Retrieved on August 01, 2016
Mok, C., Sparks, B., & Kadampully, J. (2013). Service quality management in hospitality, tourism, and leisure. Routledge. Retrieved on August 01, 2016
Walker, J. R., & Walker, J. T. (2012). Introduction to hospitality management. Pearson Higher Ed. Retrieved on August 01, 2016
