With a portfolio of some of the most recognized brands in th e industry, IHG aims to please guests and owners alike
When Stuart Laurie, director of Franchise Sales and Development, Canada for InterContinental Hotels Group PLC, steps off the elevators at his Toronto office, he’s immediately confronted with a visual reminder of his organization’s recent hotel-of-the-year coup. Lining the walls like an orderly parade, staffers’ mugs smile back at him in a framed tribute to the vital role people play in the success of a massive corporate entity.
“People are the centre of what we do,” Laurie says, matter-of-factly. “It’s important to make sure we give our employees the opportunity to be themselves and to bring their outside lives into the office. To make a more dynamic workplace — that’s really the crux of it.” That might explain the shot of the night auditor decked out in Spandex and New Balance, and, further along the wall, the whisk-wielding front-desk clerk and the rock climbing concierge. By encouraging employees to celebrate their personalities, Laurie has been able to create a more dynamic workplace.
On the face of it, this year’s pick for Hotelier’s prestigious prize is a bit of a no-brainer. After all, IHG boasts a glittering portfolio studded with some of the most recognized and respected hotel brands on the planet. Along with extended-stay properties such as Candlewood Suites and Staybridge Suites, the organization packs the big guns of InterContinental and Crowne Plaza as well as the staying power of the Holiday Inn name. It is the largest hotel company in the world, attaching the full weight of its legacy to almost 4,500 properties in nearly 100 countries and territories. What’s more, it’s an operation constantly on the move, currently nurturing some 1,200 hotels (representing 186,000 rooms) in the worldwide pipeline; and this comes in the wake and looming fear of another widespread economic crisis.
But the work this honour acknowledges from the hospitality behemoth is as much a function of what takes place within its well-appointed walls as what takes place outside. In the last five years alone, IHG has stimulated $1.5 billion of spending across Canada’s hotel landscape. Half a decade of growth has spurred a considerable flush of investment — whether through new builds, property transformations or investment in its employees. All told, 33 properties with more than 4,000 rooms are poised to enhance the current count of 157 open hotels, representing more than 23,000 rooms in the market. IHG, a global business whose midscale hotels servicing domestic travellers account for approximately 80 per cent of its business, has a sound business model that’s proven resilient in economic downturns.
“Successful companies don’t stop investing,” says Gopal Rao, vice-president, Sales and Marketing, Canada. Indeed, his company beefed up its sales force by about 25 per cent right in the thick of the downturn. “While it might be tempting to pull back, we did the opposite. We wanted to be ready when the economy turned around. Big and bold companies make big and bold moves,” he says, proudly.
“Successful companies don’t stop investing”
Among the other big and bold moves recently undertaken by IHG, is the launch of the Holiday Inn Downtown Centre hotel, which clocked in as the company’s largest property when it opened on Toronto’s Carlton Street this past April. Boasting 513 rooms over 23 floors, this downtown property stands as a grand-scale example of a corporate-wide refocus on quality, improved arrival and welcome features, as well as enhanced bedding and showers. The existing building was gutted and completely redesigned in modern, colourful strokes. And, in a show of support for the iconic brand, neighbourhood businesses participated in the “Paint-the-Town-Green” initiative, wherein they decked out their doors in the hotel’s signature green in advance of the opening.
As for the skeptics who can’t imagine there’s much financing around to bankroll such bold moves, Laurie has news. “There is money out there,” he says. But it’s attaching itself only to those directed deals associated with strong brands, solid owner operational histories, stable markets and healthy sponsors. Of the eight new Canadian licenses IHG signed this year, half are new builds. It anticipates 12 by year’s end. Among the new builds, there’s a 136-room Staybridge Suites in downtown Hamilton, Ont. and a 110-room Holiday Inn in Estevan, Sask. Among the conversions is a 258-room retrofit at the Sherwood Park, Alta., Holiday Inn and a 117- room Holiday Inn Express in Sault Ste. Marie, Ont.
The Power of Community
All this hustle and bustle, even despite an unsteady world market, doesn’t surprise Glenn Squires. As CEO of Bedford, N.S.-based Pacrim Hospitality Services Inc., which owns nine IHG properties, Squires has been involved with IHG since 1977. Today, he’s the incoming chairman of the IHG Owners’ Association, an organization he credits with encouraging and exemplifying the thriving relationship IHG enjoys with its franchisees. The association boasts an impressive participation rate of a little under 70 per cent. Canadian owners clock in at the highest degree with more than 85 per cent. Such community — which congregates regularly to share best practices in terms of sales and marketing, brand standards, loyalty programs, customer service and quality assurance — is critical, says Squires, and the enthusiasm owners have for it is telling.
Ultimately, Squires believes people buy franchised hotels according to the value they’ll receive, the market share they’ll score and the rate they’ll be able to charge compared to other brands. Dating back to the days of Holiday Inn founder Kemmons Wilson, IHG has conveyed an enduring presence inside its franchise community that’s proved a powerful selling point for would-be franchisees. From the beginning, says Squires, Wilson wanted to have an owners’ association with whom management could interact on business issues. “We believe the relationship between IHG and its association is unique, simply because of the way we collaborate and align,” he says. The fact it’s been in place, uninterrupted for more than 55 years, doesn’t hurt either, nor does the mass of humanity that backs it. The unwavering show of support by employees for high-level initiatives is significant, says Rao. “We’re a company about our people,” he says. “Our greatest asset in our brands and in the reputations of our brands is our people. We have a vested interest in making sure we have the most engaged workforce in our ranks.” IHG pulls that off through a number of measures, including a twice-yearly survey of employee engagement. And IHG’s so-called “winning ways” — aim higher, do the right thing, show we care and celebrate difference — are the cornerstones of an employee’s contract with the company. Says Rao, “We want to make sure our people not only know these values but believe in them. We live every day with that guiding principle.”
More than that, IHG makes a promise that everyone will have “room to be yourself.” That’s where the celebration of extracurriculars kicks in. In partnership with the IAHI, the company launched the first annual Celebrate Service week in 2010. This past June, close to 3,000 hotels and corporate offices, along with more than 330,000 IHG corporate and franchise employees around the globe, participated in the industry’s largest worker recognition program. The event swirls around a whirlwind of barbecues, staff parties, breakfast giveaways, personalized thank-you cards, sports days and prize draws.
All of this activity speaks well of a company cognizant of the importance of never resting on its laurels. “Our company is proactive, not reactive. That makes a big difference. The people who manage our brands are constantly walking in our customers’ shoes every day.”
Recently, that walk might have led them into the kitchen, to learn more about Holiday Inn’s newly launched food and beverage solution. Sparked by a consumer survey, IHG’s “Social Hub in Holiday Inn” program encourages guests to mingle in a central area, rather than eating room service alone in their rooms.
Among other initiatives designed to prove the value of the brand’s commitment to innovation and collaboration is Green Engage, IHG’s comprehensive online sustainability system. The program provides member hotels with information on what they can do to improve their sense of environmental responsibility, and it provides them with the means to conserve resources and save money (by measuring, managing and reporting on their hotel energy, water and waste consumption as well as benchmarking and creating action plans to track progress). Green Engage was recently endorsed by LEED, making IHG the first hotel company to have an existing hotel program endorsement.
Holiday Inn Redux
Next to franchisees’ well-serviced record of growth, IHG principals point to the massive and meticulous brand overhaul as its source of award-winning power. The Holiday Inn makeover has worked its transformative way through more than 3,300 properties over the past four years, and marks the world’s biggest-ever hotel brand re-launch in industry history.
The $1-billion relaunch was all about giving an almost 60-year-old global icon — one of the most recognized brands in the world — a shot in the arm. “Like other brands, it can get old if it’s not constantly cared for and refreshed,” says Rao, who hastens to add the move wasn’t about trying to fix something that was broken. “It was about making sure the relevancy of the brand continued to remain strong in the minds of guests and, most importantly, in the minds of owners.”
The extremely detailed and exhaustive process started through an exercise in understanding the consumer. IHG interviewed more than 30,000 people around the world to learn what customers wanted. What it heard, unequivocally, was a call for a hotel company that would treat them as individuals — not nameless, anonymous sources of revenue. IHG took that important insight in hand and referred to it frequently throughout the relaunch process.
“Some hotel brands bake cookies; we chose not to go that route”
That process is illustrated with the experience of a guest’s arrival and the sensory inputs wrapped up in that. Revamped properties now glow from the roadway. Shafts of ‘up lighting’ have been installed on the grounds with blue lighting for Express properties and green for Holiday Inn. Once inside, guests are treated to a lobby infused with earthy, floral scents released from new scent machines, gadgets the owners think will one day be linked with its brand. “Some hotel brands bake cookies; we chose not to go that route,” says Rao.
Next up: music. All revamped Holiday Inns now feature piped-in tunes customized to the hotel’s geographic location. The third improvement IHG made was in the lobby itself. “We drew a very hard line on decluttering the space and making sure sightlines were clear,” says Rao. The company took pains to be consistent with public space. Today, every lobby, in every Holiday Inn, in every country looks the same. “When there’s inconsistency,” says Rao, “you know there’s a break in the quality chain.”
The revised in-room experience is multifaceted, complete with a new pillow package. Holiday Inn’s ‘pillow menu’ uses a coloured tag system that lets guests choose just the right pillow for a restful night’s sleep. Its upgraded bathrooms featuring improved amenities promote a modern feel.
The final touch of the refurbishment is a spanking new logo. The iconic emblem with the slightly leaning script and starburst made way for a clean, contemporary take that leaves no doubt in consumers’ minds that they’re at a Holiday Inn. Notably, franchisees’ permission to use the reworked logo was reserved until the end of the process. Only when head office was comfortable an owner had taken all the steps to refresh the brand would it grant a franchisee permission to fly the new flag.
Rao says a company that embarks on such a vast and thorough overhaul, with no particular calls to do so is meaningful. It’s not just a proactive measure, it’s about a commitment to continuity. “The Holiday Inn relaunch is not a onetime thing. We’ll continue to innovate and continue to add relevance.”
Crowne Plaza, with 394 properties (202 in the Americas) and another 24 in the pipeline, is slated for a similar refresh, though on a smaller scale.
The initiatives are paying off. In the first half of 2011, revenues were up 10 per cent, translated as a 23-per-cent growth in operating profit. Additionally, the company posted a Canadian RevPAR growth of 6.7 per cent, at a growth rate of 2.1 per cent.
Last year’s total gross revenues in Canada were $673 million. The company’s fastest-growing brand is Holiday Inn, which is reaping the benefits of the $1-billion relaunch with signings that were up by 30 per cent in the Americas in the first half of 2011. Despite the tough financing environment, IHG continues to add more deals to its pipeline than any of its major competitors. IHG’s newest brand, Hotel Indigo, has proven successful, with 36 new openings and 57 in the pipeline for development.
IHG continues to be the largest hotel company by number of rooms, even during economically challenging times. “There were more than 250 hotels that were opened in the first half of 2010,” says Rao.
“After being recognized as Company of the Year, I feel like I just won America’s Got Talent”
Success is measured equally by the company’s commitment to the community it serves. In the past year, it has entered into a partnership involving CARE International’s Shelter-in-a-Storm program. This initiative allows IHG to increase corporate social responsibility by providing emergency aid for natural disasters and helping communities rebuild during hard times. Additionally, the company volunteers to programs such as CIBC’s Run for the Cure, the Daily Bread Food Bank and the Ronald McDonald House.
“After being recognized as Company of the Year,” swoons Laurie, “I feel like I just won America’s Got Talent. I mean, we weren’t just listed in the top 10, we’re not just part of the final four, we actually won the grand prize.” Sounds like there’s a case to be made for a photo of Laurie dressed in dancewear, bound for an IHG lobby.
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