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IHG in Market Share Play More hotel companies are ramping up the guest stealing rhetoric. Here is what execs at IHG plan to do. Thursday, October 25, 2012 Glenn Haussman

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InterContinental Hotels Group is looking to take your hotel guests. Well, only the ones that are not already staying at IHG branded properties. And the move is symbolic of a bigger trend occurring in the lodging business; an emphasis on taking customers from the competition rather than waiting for the hospitality pie to grow.

At IHG, the company is looking to cross-sell more effectively between brands, clarify and simplify when each of its brands mean and also empower its owners and operators to get more aggressive with pricing.

The key to it all, say the company’s top executives, is to create powerful brands that resonate with consumers. The stronger the brand the more relevant that brand is to the consumer. In theory, higher relevancy creates brand loyalty and the dissolution of discounting pricing while also creating opportunities to sell other IHG brands to consumers for different types of stay occasions.

Whew. Got that?

So at this year’s IHG Americas Investors and Leadership Conference the event tenor is firmly focused more on the potential value of each customer and how to get each person to spend more at IHG branded properties such as Holiday Inn, Crowne Plaza, Hotel Indigo and Staybridge Suites. In all, the company has 10 brands, including the new Even brand which is focused on healthy living. That first property will open in New York City in 2014.

“The customer will pay a premium for brands they love. We are very focused on brands and being brand-hearted,” said Richard Solomons, IHG’s CEO. “Brands need to be clearly defined and consistently delivered with relevant brand standards. We are looking to drive more multi-brand stays

So the event is not chockablock with big news nuggets, although there is a smattering of that too. For example, IHG Americas President Kirk Kinsell announced that all new hotels will get a 20 year licensing agreement rather than a 10 year deal. Their belief (and we concur here at Hotel Interactive) is a longer term will give banks more confidence in lending for new construction with a 20 year guarantee. The company also said it is in the process of reinventing its Holidex Plus System.

Instead, the event is looking to create good vibes between owner/operators and IHG.  Our read is the Great Recession has been incredibly tough on certain franchisees and they have lost confidence in the ability to charge higher rates. And from that lack of confidence friction formed in some cases between the franchisee and franchisor.

So to ameliorate bad feelings and end the blame game, IHG executives are emphasizing to franchisees the tools IHG already has that will aid operators in running their businesses more effectively. Hence the theme of the event: Winning Together.

“Many of you haven’t felt the recovery, it remains a challenge. There are opportunities for all of us stay focused on things we can control and be bold as we move forward,” said Kinsell. “To survive and thrive we need our family of brands to always be the first choice of guests and owners.”

IHG currently offers about 400 different tools to help hoteliers be more successful and the first day of the event highlighted several top ones to get owners and operators more engaged since they are being used – depending on the specific tool – by just a third to half of properties. The corporate stance is operators must use the tools if they want to make more money.

Glenn Squires, the outgoing Chairman of IHG Owners Association said attendees need to embrace change if they want to want to make more money at their properties. “Brand preference is how we are going to work together. We are all going to have to be more engaged and embrace change,” he said.

Steve Sickle, Global Head of Sales and Distribution at IHG, agrees. “We have to grab market share. For us to be winning others have to be losing. We must grow share of customer. I want all their nights in IHG brands, or at least the majority. We must cross sell the portfolio more aggressively than in the past. Oftentimes they don’t know of our brands or are not incented to try them. We are going to change that and need to sell in way that drives rate premium. The last thing we want to do is sell a room at $100 if they would pay $120,”said Sickle.

Finally, Jim Anhut, SVP Americas Brand Management said brand standards are more critical than ever to help define a brand for the collective consumer mindset. “We need standards that reflect what matters most to guests. Standards are the key to consistency and we have to get them right. We are going to make it easier for you to comply and use as a competitive advantage,” Anhut told attendees.

The most interesting news is yet to come as plans for Crowne Plaza brand has yet to be revealed. The brand has lost its footing and IHG is working to reinvigorate the brand by redefining what it means. More to come on this topic next week!