Technology as a Competitive Method: The Case of InterCotinental Hotels

BY.Nichakamon Ruanhdech

ID : 1021518Master program of Tourism

and Management

Content

Background Introduction Case summary Case analysis Case discussion

InterContinental Hotels Group

A brand of upscale luxury hotels, founded by Pan American World

Airways, under Juan Trippe, and now owned by Intercontinental

Hotels Group. The chain operates close to 36,000 hotels and

resorts nearly 100 countries around the world.

IHG's family of hotel brands has a powerful heritage that guests know and love, with hotels that are instantly recognised by millions around the world.

From the first Bass brewery in 1777 to one of the world's leading hospitality companies, IHG's history is one of pioneering people and new ideas, built on a foundation of consistency, trust, innovation, caring and resolve.

In April 2003, InterContinental Hotels Group (IHG) was officially formed following Six Continents PLC's separation of the group's hotels and soft drinks businesses from the retail business (named Mitchells & Butlers plc).

Over the last decade, IHG has worked relentlessly to build its brands, talented people and delivery systems and underpin it all by our responsible business practices.

In 2013, IHG has over 4,600 hotels in nearly 100 countries around the world. IHG's goal is to create Great Hotels Guests Love; its brands are in 13 of the 20 largest hotel markets with more guest rooms than any other hotel company in the world.

InterContinental Hotels Group

E-commerce or Electronic commerce set of technologies, application, and

business processes that link business, consumers, and communities.

For buying , Selling , and delivering products and service.

For integrating and optimizing processes within and between business.

What is E- Commerce??

E-commerce with hospitality industry

In 1999 – consumers spent $4.2 billion on travel – related purchases through the internet.

In 2000 – Revenue increased to be $6.3 billion.

In 2003 – Revenue increased to be $16.6 billion either through individual sites or third-party sites.

Investment in Technology as competitive methods

Company ’s e-commerce strategy is a multidimensional process : consumers, customer , franchisees and owner.

In 1965 – Holiday Inn launch “Holidex reservations system”.

Brian Langton (CEO) believed in the need to integrate key marketing , reservation and operating system into one strong technology based system and also foresaw the future of technology to be unique comparison in the industry.

Investment in Technology as competitive methods

For the company’s upscale and middle scale brand , licensees were given a choice of three new PMS models , all windows based.

A Unique satellite network setup enabled to communicate with its many properties and also connect the PMS to Holidex and HIRO , the chain’s revenue management arm.

Technological link between the chain’s internet site and the Holidex system.

The credit card can activated guest room access which enable travelers to bypass the traditional lobby check in.

Investment in Technology as competitive methods

Tech Pack (Technology Package)

Loyalty Program

Using Bluetooth technology at holiday

inn location in New York.

“Java” for its ease development and simple methods of

tying to back end database

Intranet Fact book Bhronline.com

(Business – to-business portal for its franchise)

www.meetings.basshotel.com

Online Booking

Investment in Technology as competitive methods

In 2005 –IHG launched a new global intranet content management

systemHRM Software

E-menu , E-Host , E-Postcards

In 2006 – Create position of CIO (Chief information officer)

Environmental Scanning

Economic- Rise of developing and emerging economies during

2000 – 2010- Economic output of 176 markets expanded by $17.4

trillion from 2000 to 2006- China catching up an emerging economy

Political and Legal - Globally stable, no dramatic dispute among leading

countries. Technology

- IT becomes a key of comfort for travelers- IT is a key tool to attract and increase IHG’s internal

process to improve (opportunity & strength.- E-Commerce penetrated to business community - Growth of online community and social media

InterContinental Hotels are creating a niche with technology & eCommerce

SWOT Strengths:

- Well-recognized brand name- Leader in conference organizing (business travelers)- Leader in hotel chain group- Experienced management team internationally, highly experienced personnel

Weaknesses:- Large organization – slow movement/change- Diversity of some hotel locations & cultures - difficult to manage

Opportunities:- Expansion of global economy and Asian emerging markets- E-commerce and online community become increasingly widely adaptable.- Stable global political and legal environment

Threats- Higher demand of IT and online connectivity from customers- Gap of computer/Internet competency of hotel customers

Forces Driving Change

Technology innovation.

Issue of customer service fulfillment.

Revenue expectation from online booking.

Enhancing hotel hospitality image.

The company workflow across worldwide office or between chains.

Competitive Method

Building hotel reservation system. (Holidex)

Building and Developing technological frame work between chain’s Internet site and the Holidex system.

Loyalty Program.

Creating the up-to- date tools for customer service fulfillment.

Case Discussion

1. Briefly discuss how the impact of technological advancement in the environment changes our lifestyle and the way that business responds to these changes.

Technology is a tool or set of tools and able to making some aspect of life better, easier, or more efficient.

Science and technology have great potential to improve lives in all communities around the world.

Every technology has changed our lives which is decreased difficulty of work and will be able to response the customer demand immediately.

Businesses are using technology to gain industry advantage in many ways. “The successful companies of the next decade will be the ones that use digital tools to reinvent the way they work. These companies will make decisions quickly, act efficiently, and directly touch their customers in positive ways.”

2. Using InterContinental as an illustration, discuss how the company commits to technology as one of its competitive methods to gain industry advantage ? And how to differentiate among competitor and gain market share ?.

Their company strategy was based on the leadership of its CEO, Brian Langton, who believed in the need to integrate key marketing, reservations and operating systems into one strong technology based system that would lead the industry as Holiday Inn had during the 1960s.

Environmental scanning could predicted the future or opportunity of technology which was e-commerce and integrated necessary technologic developments to their company.

Technology investment of company included the tools for customer fulfillment and tools for developing the resource of hospitality.

For differentiation among competitor and gain market share ;- Invest the new technology which is response and appropriate with global trend.

- Providing the high-technology with specify customer group.(Medical , Conference group etc.)- Advertising or promoting the image of hotel.

3. Identify the key determinants behind technology advancement. Identify and support the three you believe to be most important.

Companies should select the right technology at the right time. Amount of the budget allocated to be spent in technological development is another important issue.

The performance of “coalignment” among forces driving change , strategy choice , and organization structure.

The efficiency of staff who have experience in developing the new technology solution in hospitality industry.

Thank you very much for your participation.