Veeren GowreaSWOT analysis of InterContinental Hotels Group Plc
This is a detailed SWOT analysis of InterContinental Hotels Group Plc (IHG). It aims to examine the strengths and the weaknesses of InterContinental Hotels Group. It also aims to explore some of the opportunities and the threats facing the company. IHG is a British multinational hospitality company, headquartered in Buckinghamshire, England.
Strengths of InterContinental Hotels Group Plc
Profitability
Lock (2021) reports that the revenue of InterContinental Hotels Group in 2019 was around $2.08 billion. In 2017, the hotel group delivered strong underlying profit growth and opened its highest number of hotels since 2009, including the most ever in both AMEA and Greater China (IHG, 2021).
Global presence
IHG operates in 100 countries and is one of the leading organisations in its industry. It has over 886,000 rooms globally. Its main brands are InterContinental, HUALUXE, Kimpton, Crowne Plaza, Hotel Indigo, EVEN Hotels, Holiday Inn, Holiday Inn Express, Staybridge Suites Hotels, Holiday Inn Resort, Holiday Inn Club Vacations and Candlewood Suites Hotels.
Effective recruitment strategies
IHG has established a strong recruitment strategy whereby it has got rid of the HR generalist approach and re-allocated the recruitment function to functional or operating departments. For example, payroll function was distributed to payroll departments and line-level recruitment was handed back to departments, thus eliminating the unnecessary delays and bureaucracy of recruitment.
Weaknesses of InterContinental Hotels Group Plc
Controversies
IHG found itself stuck in a number of controversies in the past. For instance, there was an international boycott campaign against it in 2013 for its decision to open a luxury hotel in Tibet. It was also accused of price fixing, and poor hygiene standards. These controversies affected the brand image badly.
IGH Rewards Club
The group’s loyalty programs such as Holiday Inn Priority Club and IGH Rewards Club have drawn numerous negative customer reviews. It was claimed by many customers that the points promised were not always given to the customers. Many customers were told the points have expired when they tried to redeem them. Loyalty points do not have expiry date!
Weak IT security
1,200 IHG hotels were infected with credit-card stealing malware and guest information such as cardholder name, card number, internal verification code etc. were stolen (Kastrenakes, 2018).
Opportunities for InterContinental Hotels Group Plc
New geographical markets
Partnership in India with SAMHI group will rebrand 2000 rooms to Holiday inn express hotels. IHG in China is planning for 300 new hotels in China within the next five years 2018-2023 (USCHNEWS, 2018).
More products/services
15% of gross revenue of InterContinental Hotels Group Plc in 2020 came from non-room services with 13% from food and beverage (IHG, 2021). Therefore, introducing more food and beverage items is worth exploring.
Threats to InterContinental Hotels Group Plc
Global crisis
The global financial crisis and economic lockdowns affected InterContinental Hotels Group Plc very badly. It announced a massive loss in the first quarter of 2020. It also had to cut jobs in many countries. Macro environmental challenges may sometimes turn out to be extremely challenging for any organisation.
Competitors
The top competitors of InterContinental Hotels Group Plc are Marriott, Wyndham and AccorHotels group, with more competition from Hilton, Hyatt, and Choice groups.
Hotel recruitment in China
With the huge expansion in china, IHG is faced with a huge challenge as only half of graduates in China choose hospitality sector to work and there is a skill and training gap in front‐desk and restaurant staff, as well as key executive positions in HR, finance, and sales.
Concluding statement
From the research conducted for this swot analysis of InterContinental Hotels Group Plc, it is clear that IHG is the least problematic of all the big hospitality groups worldwide. This is due to its effectiveness in branding and in operational management. Furthermore, the group’s leadership seems to be more long-lasting and established in their positions.
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Last update: 27 March 2021
References:
IHG (2021) Annual report, available at: https://www.ihgplc.com/investors/annual-report (accessed 25 March 2021)
Kastrenakes, J. (2018) “1,200 InterContinental hotels were breached by credit card stealing malware” https://www.theverge.com/2017/4/19/15363800/ihg-credit-card-breach-details-lookup-tool (accessed on 04 July 2018)
Lock, S. (2021) Revenue of the InterContinental Hotels Group (IHG) from 2007 to 2019, available at: https://www.statista.com/statistics/273254/revenue-of-the-intercontinental-hotels-group/ (accessed 27 March 2021)
USCHNEWS (2018) “Intercontinental Hotel Group to Add 300 China Hotels Within Five Years “ http://uschnews.com/ihg-to-open-300-more-mainland-china-hotels-within-five-years/ (accessed on 04 July 2018)
Photo credit: Emirates.com
Author: Veeren Gowrea
Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.
M Rahman