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New Report from IHG highlights need for hotel brands to be '3D' to win future guests - Global, Local and Personal

Tuesday, January 21, 2014
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InterContinental Hotels Group
InterContinental Hotels Group
Franchisor of 9 brands globally

  • IHG publishes primary research study covering 7,000 international travelers worldwide
  • Report highlights critical success criteria for global brands delivering localized and personalized guest experiences, enabled by technology
  • Research also finds that guests from emerging markets are travelling more than their developed market counterparts, and have the highest expectations for hotels to deliver personalized experiences

A new report published today by InterContinental Hotels Group (IHG), ‘Creating Moments of Trust – the key to building successful brand relationships in the Kinship Economy’, suggests that to win guest loyalty in the future, hotels need to deliver a global, local and personalized experience. The research also shows that personalized brand experiences, which resonate with the local culture, are particularly important for the fast-growing number of international travelers from emerging markets.

The collision of these three dimensions, accelerated by the rapid rise of technology-enabled personalization in recent years, is changing the experience guests expect when they travel. Hotel brands that are able to become truly “3D” – by delivering localized and personalized experiences through trusted global brands - will build the trust that is needed to sustain lasting relationships with guests and outperform in the future.

Last year, IHG published: ‘The New Kinship Economy’, which highlighted a transition from brand experiences to brand relationships in the hospitality sector. This year’s report builds on this work to help IHG gain a deeper understanding of what it is that travelers around the world want from their relationships with hotel brands.

Commenting on the report, Richard Solomons, IHG Chief Executive said:

“This report marks a step-change in the thinking that has dominated the travel and hospitality industry over the last two decades. Hotel brands have traditionally concentrated on being 2D – how to be both global and local. But our research shows that the rise of personalization means brands must be 3D in order to build both trust and lasting relationships with guests and to win in a highly competitive global market.

“We know that our guests trust IHG’s global brands to deliver on a promise of quality and consistency time and time again. But they increasingly expect these same brands to deliver localized and personalized experiences, whether they are travelling for business or pleasure. That is why we have developed our ground-breaking HUALUXE Hotels & Resorts and EVEN Hotels concepts, and why we are focused on supporting technology-enabled personalization across our brand family.”

The report, surveying more than 7,000 international travelers, shows that over the last 12 months, emerging market travelers have been traveling more frequently than their developed market counterparts. Whilst they are more likely to look to a global brand for an assurance of quality, emerging market travelers are also more likely to make choices based on differences between hotel chains. This group prize personalization and fit with local culture most highly of those surveyed. These trends point to the importance of trusted global brands being able to deliver the combination of localized, personalized experiences. The report also shows that initiatives that allow guests to create their own experiences through technology are equally important, particularly to the Millennial ‘Laptop and Latte’ business traveler group – which has the most trust in global brands to be innovative.

IHG is already addressing the growing consumer demand for 3D brands in a number of ways. Two examples include the development of our two newest hotel brands: HUALUXE Hotels & Resorts, the first international hotel brand designed specifically for Chinese travelers; and EVEN Hotels, the first mainstream holistic wellness hotel brand. These new brand launches build on IHG’s existing focus on delivering a higher degree of localization and personalization across our portfolio of trusted global brands.

Findings in the report include:

  • Global: Travelers think that global hotel brands do a better job than local hotel brands on several dimensions, including safety and consistency. Travelers also expect global brands to do a better job at offering the most innovative features and services. This is especially true for the younger generation of business travelers - 75% of the Millennial 'Laptop and Latte' business travelers (a new traveler group IHG identified in last year's Kinship Economy Report) think that global hotel brands do a better job of being innovative compared to 66% of all travelers.
  • Local: Travelers now expect global brands to be relevant in terms of local tastes, customs and cultures. Travelers from emerging markets hold this view most strongly – 68% of travelers from Brazil, 60% from UAE and 58% from China disagree with the statement “a global brand can never be a good fit with local culture.”
  • Personal: For the majority of travelers the biggest benefit that personalization delivers is increased comfort during their hotel stay – 59% of travelers say that their hotel stay will be significantly more comfortable.
  • Increased comfort is followed by the benefit of feeling more valued by the hotel brand – 54% - and in emerging markets personalization makes travelers feel more respected by the brand. 62% of Chinese travelers agree that personalization makes them feel respected compared to 39% of travelers from all countries surveyed.
  • The principle of respect underpins IHG’s HUALUXE Hotels & Resorts brand, which takes the best aspects of renowned Chinese hospitality and applies IHG’s international scale, powerful systems and insight into the Chinese market to consistently deliver the hotel experience expected by Chinese consumers.
  • 62% of Millennials said that being able to access personal content – such as movies or music – would motivate them to return to a hotel compared to 55% of travelers of all ages. 72% of travelers over 65 said a hotel that made it easy to make healthy food and beverage choices would motivate them to return, compared to 61% of Millennials.
  • Emerging market travelers: The “new global explorers” – a new group of travelers originating from emerging markets identified in last year’s Kinship Economy report – have higher expectations for personalization than travelers from developed markets. 64% of Chinese and 62% of Brazilian travelers expect a hotel to tailor the experience they have to their personal needs, compared to 43% of US and 42% of UK travelers.
  • Travelers from emerging markets are also more likely to look to a global brand for an assurance of quality - 60% of Russian and 54% of Chinese travelers versus approximately 40% of US and UK travelers. They are also the most discerning hotel guests – being more likely to report variance across brands when they travel.
  • These travelers prize personalization more highly than developed market counterparts as well as trusting global brands more than local with their personal data. 82% of Chinese and 69% of Russian consumers believe that a global hotel brand won’t misuse personal data.

Based on the research being published today, IHG has identified six ‘trust-building’ actions that will help its hotel brands around the world deliver the 3D experience that guests increasingly expect. These actions are detailed in the report and are:

  • Be consistent
  • Deliver authentic local customization
  • Create tailored consumption
  • Support technology enhanced service
  • Personal relevance
  • Use service to surprise and delight

For more information on the IHG 2014 Trends Report, please visit www.ihgplc.com/Trends_Report.

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