Analysis of IHGs UK Products and Future Recommendations - Essay Example

ANALYSIS OF IHG’S UK PRODUCTS AND FUTURE RECOMMENDATIONS Analysis of IHG’s UK Products and Future Recommendations The International Hotel Group is a multinational hotel company with a portfolio of great hotel brands. They boast over 720,000 guest rooms, more than 4,900 hotels in approximately one hundred nations. IHG acknowledges the shift towards digital technology and, as a result, allows its customers find a hotel from its new redesigned website. The site also gives customers news about the plans for the company, new offers and its history and pledge to the clients. When a prospect opens the reservations page on the IHG website, they get a popup that asks them if they would like to provide feedback after their visit or not. Customers can search for a hotel using filters such as the city, airport, address or point of interest. Also, they can state the dates that they would like to visit these hotels. Then, they choose their rates from a drop-down menu. Finally, they click on “Find a Hotel” button, which generates the results based on the filters (Ayeh 2015). IHG has done a brilliant job with its website. However, most customers today use social media more than search engines and websites to look for information and advice. IHG has a Facebook page with 83,865 likes. However, with a company as large as itself, IHG does not frequently update its Facebook page. For example, its last update was on 8th June in which they talked about their service week. Also, some pieces of information are not relevant to the customer. For instance, the next update after the service week news was on May 7th, in which the company had announced its Q1 Interim Management Statement. Most customers do not care about such information. All they want to know is what services they will get when they visit one of IHG’s hotels (Aluri 2015). The trend seen in Facebook can also be seen on Twitter. One update was made fourteen hours ago, the next on June 12th, June 8th and so on. Although the company does a better job with Twitter than Facebook, it does not appeal to the vanity or ego of the customer. What IHG fails to do consistently is tell its customers what they will experience by visiting the hotels. Moreover, the company does not segment its customers based on the many filters available. For example, IHG boasts its presence in approximately one hundred countries. However, people from one country do not have the same tastes as people from other countries. Therefore, the same marketing methods cannot be used. Moreover, with customers shifting to social media, it is imperative that IHG’s social media pages be segmented based on the geography of its clients (Huang 2015). IHG has a mobile app that enables hotel booking and searching for deals. With more than 4,700 hotels in more than a hundred countries, only 7,136 people have downloaded it to their Android devices. It shows that although the company has taken steps to incorporate social media and mobility into its marketing engine, it does not take it very seriously. Companies like Amazon, Google, Facebook, and Twitter have grown by improving and focusing on user experience through social media and mobile devices. IHG can do a better job on these fronts than it has done. In fact, IHG’s website does not mention the existence of a mobile app for booking hotels, and this is a costly mistake because the marketing engine should be seamlessly interconnected (Hua 2015). Recommendation for a New Product in the UK Market The International Hotel Group should prepare for the future and the changing business landscape. The future of the hotel industry will be characterized by increased competition, expanding commoditization, geographic, economic and demographic shifts. Many businesses acknowledge that the world is using new technology and innovating at a pace that has never seen before. It is now time for hoteliers to change their technology strategies and leverage on the impact that technology advances can make in their businesses (Hua 2015). New initiatives and technologies are needed to keep pace in this new world, become differentiated, compete and meet the complex expectations of guests in this buyer-dominant market. Competition is the primary driver for new offerings and innovation with the aim of enhancing and complementing overall brand equity. Therefore, to grow their business, hoteliers will have to work on many fronts simultaneously. They will have to create analytics capabilities, keep up with mobility advancements and improve on their existing customer touch points. Also, they will have to use technology to create customer experiences that are differentiated (Kim 2015). IHG needs to focus on technology as a growth catalyst to help make bold decisions. As a result, they will overcome the constraints of the current technology. These constraints may be too costly to allow for the pursuit of new opportunities. One of the largest barriers to growth has been the property technology landscape (Aluri 2015). These obstacles include legacy property management solutions, lack of reliable connectivity models to primary enterprise systems and incompatible point-of-sale systems. New technology offers companies such as IHG the ability to rethink how to use IT to ease their need to innovate and provide new offerings to customers. Technology will be imperative in creating a personalized customer experience. The foundation of managing a guest’s experience from the time the guest plans a trip, when they check in, check out and even after they leave. Technology will play a crucial role in helping achieve one of the chief trends in the hotel industry. The trend involves the shift from managing the room to creating total guest experience. The change will enable IHG to determine the full revenue potential of a guest. Technology will also help in management operations as well as improving the overall experience. It will also improve sales and marketing approaches to reducing costs and increase efficiency (Kucukusta 2015). IHG should begin with developing the analytics. Analytics is a transformational phenomenon that will give the company better ability to tailor guest experience both on and off premise. Creating an advanced analytics program is far from easy. However, it is now time to move from sporadic initiatives and build a foundation of the technology that enables IHG to make better-informed decisions and get explanations for business performance. Through advanced decision-making capability, IHG will understand markets and customers to allow better targeting of customers, more revenue and profit growth and better pricing (Law 2015). Secondly, IHG needs to keep up with mobility. To capture the present consumer, who is always connected and highly mobile, IHG should use the technology that these customers use. The company will have to address mobility in a holistic manner so as to integrate employee and guest demands into their enterprise and property models. It will help them manage more parameters across the lifecycle of the guest. In some areas of mobility, excellent solutions exist but for others, solutions are non-existent or limited (Kucukusta 2015). The final step is to optimize the digital channels. Today, guests want to feel relevant online, as they travel and on the property. Therefore, marketers should strive to reach potential customers across all these touchpoints. Due to the increase in communication channels, IHG should determine how to remain relevant to guests and build brand loyalty and revenue. The solution is by embracing contemporary marketing. It also involves transforming the function into a discipline based on meeting the needs of the guests. Achieving all the above will require using the skills of the organization’s innovators together with its marketing visionaries. If IHG wants to remain forward-thinking, it must consider the advances in the world in exploiting the existing technologies. They will seize more opportunities, tackle challenges and create effective strategies for the future (Pappas 2015). Developing Analytics Many organizations across industries have created analytics capabilities. Ambitious companies are adopting analytics in all their branches. They redefine how fact-based insights and analytics are incorporated in vital processes, thus, making smarter decisions. Analytics enables companies to have insights that allow them better understand their customers and markets. Such understanding results in stronger brands, better customer targeting, more growth in revenue and profits and improved pricing. In the past few years, some hoteliers have invested business intelligence and reporting technology solutions for better decision-making. Moreover, hotelier companies have created a strategic initiative to move towards better usage of data across the enterprise (Rosenbaum 2015). IHG can simplify their approach by focusing their use of analytics in three main areas. They can use it to examine the decision factors that appeal to a particular type of customer, enabling them to create custom offers. Second, they can leverage on past customer preferences and behaviour to tailor appealing offers when the guests visit the hotel again. In this regard, they can use TripAdvisor, to collect third-party data points. Finally, they can capture and evaluate property data to identify the areas that require improvement. Using advanced analytics ability will affect management and revenue profoundly. Therefore, the revenue management function will have to create models to enable IHG management to view revenue as an overall value instead using room rates as is currently done (Singh 2015). Data Harnessing Over the past ten years, the ability to use quantitative data in decision-making has been the foundation for creating competitive advantage. As information technology is ubiquitous, companies of any size can use data to understand better customer behaviour, the supply chain, offer development, talent management and other areas. Data exists in many types including audio, video, and web data. Such data could not be easily extracted five years ago. In the hotel industry, there has been an increase in online forums including Yelp, Hipmunk.com, and TripAdvisor (Wang 2015). IHG will have objectives that are unique to itself when leveraging existing data, acquiring new data and using it in particular combinations to create improved results. For many hoteliers, data is severely underused. IHG should capture loyalty information. However, they do not go beyond the loyalty tier in how they view and take action with their guests. With analytics, IHG can use the data to supersede traditional loyalty programs, thus, increasing their knowledge about guests and have a detailed understanding of behaviour within the segment. They can identify profitable customer segments and identify opportunities to attract new guests (Mohd Suki, 2015). Another use for analytics by IHG is to evaluate the profits and leverage from the social media channel. An example of a website that has played a huge role in the change in the shopping experience is Hipmunk. The company brings together many data sources such as customer reviews, location and layers in heat maps depending on what guests search for online. Other leading companies in the hotel industry are integrating third-party sources of information like TripAdvisor into their websites. Besides booking, IHG needs to decide how to incorporate the captured types of data into their present intelligence platforms. Hotel companies have begun monitoring social media channels to view how the hotels and the brand are faring. With analytics, IHG will be able to link these types of feeds with internal guest and hotel data for better analysis. The aim will be to identifying the sources of leverage, and third party sites will need agreements to establish the required interconnectivity (Pappas 2015). To become successful, IHG will need to take analytics one step further. It should use guest insights to personalize interactions across channels such as digital and mobile. The result will be new products and services to offer differentiated experiences to guests. Successful initiatives by IHG in these areas will depend on the quality of data collected from these channels that requires analytics with greater sophistication to get offers and insights from it. If IHG wants to become an advanced analytics user, it will have to not understand its enterprise data, but also leverage the data that may not be captured by the company’s enterprise system (Singh 2015). IHG should aim at offering its customers better experience with the aim of increasing the revenue per room. First, they should create mobile solutions that can connect the guest during the entire stay at the hotel. Then, they should provide point services and information that are interaction-relevant. IHG needs to drive innovation using guest empowerment using systems like self-check-in, virtual concierge, mobile room key and point-of-experience surveys. Moreover, the company should enable location-based as well as geo-relevance intelligence. Guest experience should be improved depending on their preferences and location. IHG should also integrate mobile visitor analytics in their systems (Kucukusta 2015). Besides, IHG should have smart ancillary offers meant to increase the guest satisfaction index and loyalty. The above can be realized by using location-based property promotions aimed at guests and non-guests. Then, the company should check the redeemed product or service, the person redeeming it and their location. Incentives should be done intelligently based on loyalty preferences and before usage history, to help drive non-room revenue. IHG should also create a digital marketplace that is real-time, thus, discovering new avenues for offers and promotions. Loyalty points need to be used as currency, and mobile payments should help increase payment options and simultaneously lower operational costs. There should be a form of digital payment and other methods to redeem offers as mobile payment goes mainstream. Loyalty points can also be strengthened by allowing for payment of non-room items. Besides, paper couponing should be eliminated, and the amount to conversion system for offers should be reinforced (Rosenbaum 2015). Keeping up with Mobility IHG has an opportunity to create more value and reduce operational costs through mobile technology solutions. Due to the beginning and rapid growth of mobility, it is not surprising that most hotel plans are disjointed. To enable benefits that guests enjoy, hoteliers, such as IHG should answer four challenges (Hua 2015). These are mobility architecture, mobile guest applications, loyalty and mobile couponing. Hotels take different paths in serving their guests to achieve ancillary spending, bookings, and on-property integration. Now, they need to discover the best feature to offer guests through mobile applications (Law 2015). These could be single or multiple app solutions that study what competitors are doing and the results they are achieving. Mobile architecture needs to serve both consumer-based solutions and enterprise. It should offer platform and toolset standardization, consistency and reuse of security and business services. It is crucial to determine the key components that constitute enterprise mobility architecture solution. Business-to-guest mobility is becoming the new norm for appealing to guests in all areas during their stay. Therefore, IHG needs to consider how to differentiate their loyalty program from their competitors. It will help them better target their guests throughout their stay at the hotel. Digital couponing is becoming famous in all industries. IHG will need to track how customers redeem digital coupons. The information will tell them who is redeeming, when and whether it results in additional spending. Digital couponing will add a new method of harvesting data for the analytics program (Kucukusta 2015). Testing of mobile solutions is becoming more complex with new networks, platforms and devices. IHG should ask questions such as: what should they test? How do they test and whether or not testing can be done at scale? As the company answers these questions, they will have to deal with a fragmented industry landscape as they try to incorporate mobility apps. In some areas of IHG life offering, real solutions exist. In some other fields, there are limited to non-existent solutions. Nevertheless, there are no solutions that enable hoteliers to manage guest experience during their entire stay life cycle. IHG and the rest of the industry are falling short of exploiting the full potential of mobile capabilities. IHG should study a guest’s stay from arrival to departure and look for a single application to manage it all (Rosenbaum 2015). As IHG looks for mobile capabilities to handle guests during their stay, they also need to find ways to engage visitors in new and compelling ways. However, the company has to deal with the proliferation of platforms and integration required with device manufacturers, network operators, application developers and business partners. To proceed, IHG needs to start with an overarching mobility strategy. The entire enterprise’s landscape should be evaluated, and the areas of focus to an hotelier prioritized. Priority should be determined based on where mobile technology needs to be adopted. IHG will, thus, remain relevant in the industry. The company needs to know how to use it to gain an advantage over the competitors and how to leverage so as to create new business models (Singh 2015). Optimizing Digital Channels Forces in the hotel industry are driving new expectations for how guests interact with hoteliers. Interactions occur through many digital channels and points of personal interaction. Most guests today reserve hotel rooms through the internet. However, other channels are growing in importance. Due to this increase in communication channels, IHG needs to determine how to remain most adequately relevant to consumers. With numerous channels and customers, IHG needs to manage user experiences over all channels to maximize value. Besides, the company should maintain user experiences in a marketplace that is moving towards consumer relevance. Companies such as Apple, Amazon, Google, and Facebook have built their businesses by focusing on customer connection (Wang 2015). A common characteristic of successful companies is to exploit the full potential of clients at scale. It involves consistently unleashing relevant experiences across all channels. These channels consist of mobile, social, digital, in-person and traditional. IHG also needs to manage information on geography and customer intent segments. It will enable them scale at cost-effective levels while monitoring results in real-time and answering customer concerns. Companies with relevance are precise, agile, dynamic and intentional. IHG does not have to create more campaigns to remain relevant. However, they should use the flexibility and economy of scale to make relevance affordable at every moment. Using data and technology in a smart way ensures that each campaign targets the right customers, and cash connection remains relevant to the intention of each target. Hoteliers, such as IHG, have the opportunity to give customers timely and relevant offers through blending customer functions and digital strategies in new methods (Aluri 2015). In this regard, marketing companies must evolve and inspire new changes. In today’s digital era, marketing involves leaving traditional methods and improving business performance while at the same time controlling costs. It always involves being present and relevant to prospective clients at numerous points while at the same time justifying budgets and demonstrating sustainable return on investment. Although all the above suggestions cannot be achieved overnight, IHG should drive a significant shift in organizational culture where their primary focus is remaining relevant to guests. Relevance will be achieved through corporate marketing, worldwide- and property-based sales, services, and other departments that affect customer experience and on-property operations. Social media has allowed customers to talk and share information easier and faster. When a client gets excellent of bad service at a hotel, they will most likely share their experience on social media. Therefore, IHG should consider customer experience as a crucial aspect of marketing because customers will either market the organization or preach its weaknesses to other potential clients (Hua 2015). Reference List Aluri, A., Slevitch, L., & Larzelere, R. (2015). The effectiveness of embedded social media on hotel websites and the importance of social interactions and return on engagement. 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