Consultancy Report: IHG Strategic Analysis and Recommendations

This consultancy report provides a comprehensive analysis of the InterContinental Hotels Group (IHG), a major player in the global hotel industry. The report begins with an executive summary highlighting key findings and recommendations, followed by an introduction to the hotel industry and IHG's position within it. A detailed scope and analysis section includes a company overview, PESTLE analysis examining political, economic, social, technological, environmental, and legal factors, and a SWOT analysis assessing the company's strengths, weaknesses, opportunities, and threats. The main body of the report delves into improving operations, exploring management techniques, and identifying issues related to the company. Findings and results are presented, leading to specific recommendations for IHG's strategic development. The report concludes with a summary of the key insights and a list of references. The report provides valuable insights into the hotel industry and offers strategic recommendations for IHG's continued success. The report also highlights the importance of customer satisfaction, technological adaptation, and sustainability for the hotel industry.

Consultancy Report.

Table of content
Executive summary..........................................................................................................................3
Introduction......................................................................................................................................4
Scope and analysis...........................................................................................................................5
Company overview...................................................................................................................5
PESTLE Analysis.....................................................................................................................5
SWOT Analysis........................................................................................................................7
Development of reputation.......................................................................................................9
Main Body.....................................................................................................................................10
Improvement in operations:....................................................................................................10
Management techniques..........................................................................................................12
Issues related to company:......................................................................................................14
Findings and results.......................................................................................................................15
Recommendation...........................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18

Executive summary
Currently hotel industry is a multi billion dollar industry. It includes the largest sector of the
industry which is tourism. Tourism sector is an integral part of hotel industry as majority of the
guests of hotels are tourists who are travelling from one place to another and wants to stay in a
hotel. The hotels need to understand the needs of the customers and act according to that in order
to avoid any inconvenience to the customer as an unsatisfied customer is not good for the
reputation of the company. The hotels mus keep in mind that now customer has a better reach to
each and every information about the company. The company needs to improve their
management services in order to cater tourists beyond their expectations(Alnawas, I. and
Hemsley-Brown, J., 2019.). A delightful experience that the customer has will help the company
to retain the customer and to have a loyal customer base. Planning for future is one of the key
requirement to stay in the hotel industry and keep ahead of the competition. Customers avoid
hotels and restaurants that do not provide services which are expected from them. The hotels
must make sure that they are updated in terms of technology as well as emerging trends so that
they can attract customers. Hotels must also become sustainable and eco-friendly so that they can
attract the segment of customers who are environment conscious(Abubakar and et. al., 2019..
Such actions will help the company to built a strong relationship with their customers and will
also help in increasing the popularity of the hotel. It will help the company to increase sales as
well as profits of the company.

Introduction
The hotel industry is the servicing business which is highly contributing in the economic
development of the country. The hotel industry familiar with many types of industry, such as the
transportation industry, the tourism industry, and the food servicing industry (Assaf and et. al.,
2020.).The hotel industry must keep themselves updated according to the trends that are
prevailing in the market because now people has a better reach to the information about the
hotels. Interior, services, location, food, transportation are some of the major factors that
influence the customer to stay in the hotel (Al-Qaralleh, R.E. and Atan, T., 2021.). If these thing
are not up to the expectations of the customer then the company will not be able to attract new
customers and also will not be able to survive in the market. Basic hygiene can also play a major
role in the success of the company as if it is not up to the mark it will ruin the reputation of the
company. The company must provide exceptional services to the customer in order to retain
them and make sure that they come again. This will help the company to get a loyal customer
base. In context to Inter Continental Hotels Group, it is a British multi national company
headquartered in England. The company is one of the biggest hotel chains in the industry and
currently owns 8 hotels and 12 brands (Ananthakrishnan and et. al., 2020, July.). The company
uses the business model f light asset because of which most of the hotels are in franchise
agreement. The company operates in more than 100 countries and are successful in the business.
The company has approximately 5967 hotels and 886036 rooms available for the guests of the
hotel. In this report PESTEL analysis related to the company is given. The PESTEL analysis will
help the company to keep a check on all the macro environmental factors that can affect the
workings of the company. The macro environmental factors are basically external factors on
which company does not have any control. Before implementing any new strategy the company
must do PESTEL analysis so that they can take actions according to those factors. Another
analysis that is given in this report is SWOT analysis. Before implementing any new strategy the
company must analyse its micro environmental factors that has an influence on the workings of
the company ( Ayub, N.B. and Islam, M.K., 2018.). Micro environmental factors are the internal
factors of the company. Also this report will give options to the company for the improvement or
development of reputation of the company. The report will also include management techniques
that can improve the management of the company and the impact of those techniques on the staff

of the company. It includes the major issues that are faced by the hotel industry locally as well as
on international level.
Scope and analysis
Company overview
The inter continental hotel group was established in the year 2003. The group is a British
Multinational hospitality company and is headquartered in Denham, UK. The group is presently
has its presence in over 100 countries including developing economies such as India, China,
Mexico and developed economies such as UK, US, Canada, etc (Aznar and et. al., 2018.). The
group is one of the leading hotel chain company in the world with 12 different brands such as
Regent Hotels and Resorts, Kimpton Hotels and Resorts, Candlewood suites, Crown Plaza, Even
Hotels, Holiday Inn, Holiday Inn Express, Staybridge Suites, Hotel Indigo, etc. . In 2012, IHG
has 5400 hotels out of which more than 4433 hotels were under franchise agreement, 907 were
managed by company but as a separate entity and only 8 hotels were directly owned by the
company. This will help the company to keep light asset business model which will generate
more cash flow. As of 2020, the net income of the company was approximately $260 million and
has approximately 350000 employees working for the group.
PESTLE Analysis
PESTLE analysis analyse the macro environment of the company and the details about the
operating challenges that the company may face in future (Han and et. al., 2018.). Other than
competitive forces the analysis will tell the company about the external forces that can affect the
workings of the company.
Political factors: These are the factors that can influence the workings of the company as
these factors tells the company about the degree up to which the government can intervene in the
economy or the industry. These are the factors that are needed to be taken into consideration by
those who are entering into market or who are analyzing the attractiveness of a potential market.
In context to Inter continental hotels group, they need to take a closer look on the factors such as
political stability, importance of hotel’s in economy, level of corruption, legal framework

(Basnyat, S., Carr, N. and Lovelock, B., 2021). All these factors are very important to analyse as
they can severely affect the workings of the company.
Economical factors: These are the factors that tells the company about the determinants
of economy’s performance. The factors include economic growth, inflation rates, interest rates,
exchange rates and unemployment rates (Jaiswal, D. and Dhar, R.L., 2017). Since the effect of
these factors are on the purchasing power of the consumer the impact of them will be for long
term on the company. The factors can change the method through which the company prices
their products and services and can also affect the demand and supply models of the economy. In
reference to intercontinental group hotels, they need to consider economic system and its
stability of the country in which they are operating, government intervention in the market,
infrastructure quality, labor cost, etc.
Social factors: It refers to the factors that represent the dimensions of the general
environment such as demographic characteristics, customs, norms, values of the people of the
location where the company is operating. It includes career attitude, income distribution, age
distribution, lifestyle attitude, safety and health consciousness, population growth rate, etc
(.Jalilvand, M.R., 2017.). These factors are important for companies that are targeting a specific
market segment. In respect to intercontinental group hotels, they need to consider certain factors
such as leisure interests, nature of the society towards entrepreneurial spirit, skill level of
population, power and hierarchy structure in the society.
Technological factors: It refers to the factors that tells the company about the innovation
of technology prevailing in the industry. It is very important for every company to keep a check
o the updated technology that can give competitors advantage to them. The factors include level
of innovation, technology incentives, research and development activities, the amount of
knowledge about the technology that a market possess (Blayney and et. al., 2020.). In context to
company, they must do technology analysis along with the speed at which technology disrupts
the industry. It can save a lot of funds of company that can be otherwise wasted if the company
makes a technology that is obsolete and updated version is already prevailing in the market.
Environmental factors: These factor are important because they include the matters
related to scarcity of resources, scarcity of raw material, population and pollution targets, carbon
footprint targets (Cheng and et. al., 2019.). These factors also environmental and ecological
aspects of nature such as climate, whether , environmental offsets which can severely effect the

hotel as well as tourism industry. Growing concerns about the nature and environment also
focuses on how company operates. This leads to the activity of corporate social responsibility
and sustainability (Jeaheng, Y., Al-Ansi, A. and Han, H., 2019.). In context to intercontinental
group hotels, before entering any new market the company must look into some of the
environmental factors such as laws related to environmental pollution, laws related to air and
water pollution in hotel industry, waste management, recycling, whether, climatic changes,
attitude towards ecological products and support towards renewable energy.
Legal factors: These factors tells the company about what is legal and what is
illegal(Darvishmotevali, M. and Tajeddini, K., 2019.). They include more specific laws that the
company needs to follow in order to make sure that they are operating ethically and they can
trade successfully. If a company is trading globally then this factor becomes more complicated as
different countries have their different set of rules and the company needs to follow the rules and
regulation of the specific country in which they are operating (Kuo and et. al., 2020.). In
reference to intercontinental group hotel, the legal framework of some countries are not enough
to protect the intellectual property rights of the company so in order to enter any new country the
company must make sure that they consider some of the laws such as anti-trust law,
discrimination law, employment law, health and safety law, data protection act, etc.
SWOT Analysis
SWOT analysis is done by the company in order to analyze the micro environment before
implementing any new strategy in the business (Deb, M. and Lomo-David, E., 2020.). This
analysis gives an overview of the strengths, weaknesses, opportunities and threats of the
company so that the company can act accordingly. This strategy helps the company to
distinguish themselves from the competitors and get an advantage which will help them to
become successful in the market.
Strengths: Strengths are the activities or things that a particular organization does well
and this activity or thing makes them different from their competitors and give them an
advantage in the market. Some of the strengths of intercontinental group hotels are:
Focus on priority markets with wide geographical presence: the group has a strong and
established presence in most of the developing economies where people starts to spend more on
travelling and hotels which is beneficial for the company(Leroux, E. and Pupion, P.C., 2018.).

The group is currently present in more than 100 countries including UK, US, India, Middle East,
Germany, China, Canada, Russia, Mexico, etc.
Asset light business model: the company is focused on the business model through which
they are asset free and are generating more cash. By this way they are returning the surplus cash
to the shareholders approximately $5.9 billion till date from 2004 (Dogru, T., Mody, M. and
Suess, C., 2019.). The company is adopting them by reducing owned hotels to 8 globally and
adopting franchisee model in US.
Weaknesses: These are the area where the company needs some work to be done. The analysis of
this segment will provide an overview to the company about where they need improvement.
Weaknesses are inherent features of the company that are needed to be addressed (Nieves, J. and
Diaz-Meneses, G., 2018.). By working on the improvement of this factor the company can get
competitors advantage as well as build strategic positioning. Some of the weaknesses of
intercontinental hotel group are:
High carrying cost: in order to decrease ordering cost the company sometimes make bulk
purchases but the fact is that bulk purchases will increases the carrying cost of the material. It is
important for the company to find its economic order quantity and make order according to that
(Goryushkina and et. al., 2018. ).
Lack of technology: The company is lacking in updated inventory as compared to its
competitors. The company needs to update its technology so that investment in technology is at
par with Vision of the company.
Opportunities: These are the events that can happen in future and if exploited by the
company it can bring success and a huge difference to the company as compared to its
competitors (Goswami, S. and Sarma, M.K., 2019.). Some of the opportunities of
intercontinental hotel group are:
Dilution of competitors advantage: Market development will enable the company to
increase its competitor’s advantage in comparison to competitors and will lead to dilution of
competitor’s advantage.
Implementation of new technology: As the company does not have updated technology it
is an opportunity for the company to update its technology and attract customers through online
channels (Gürlek, M., 2021.).

Threats: These are the outside factors that can negatively affects the workings of the
company(Peng, X., Lee, S. and Lu, Z., 2020.). Shortage of recruits, obstacles in supply chain,
shift in the taste and preferences of the market are all threats for the company.
Rising prices of raw material: Rise in the prices of raw material can pose a threat as it
will directly affect the profitability of the company and will increase the cost of the products.
New environmental regulations: Rising in environmental protection acts and new
regulations under Paris agreement can pose a threat to the company (Gvarliani, T.Y.E., 2018.).
Development of reputation
It is important for a business to make sure that they are not doing anything that can ruin their
reputation. Reputation is the very first thing that attracts a customer towards the hotel. This is the
reason why company adopts reputation management (Köseoglu and et. al., 2020.). In this
management businesses hire PR teams and firms that can micromanage everything related to
communications or PR or scandals.in context to Intercontinental group hotel, the key to develop
reputation of hotels are given below:
Focus on review sites: It is important for the company to focus on the review sites as
most of the customers choose their stay in a hotel by looking at the ratings of the hotel that are
given by other customers who have experienced the services of the hotel on these review
sites(Rico and et. al., 2020.). Good ratings will attract customers whereas bad ratings will make
the hotel loose their potential customers. It is not an overnight task but eventually the company
will be able to see the results.
Keep a close check on social media: The company must keep a close eye on social
media so that they get to know about the current trends that are prevailing in the market and will
help the hotel to make changes in their products and services according to the preferences of the
customer segment ( Le, S., Wu, J. and Zhong, J., 2020.). Social media will also help the
company to reach wider audience and capture high market share. It will also help in looking an
eye on competitors and their activities and the trends will help the company to become popular in
the market.
Respond quickly to negative comments: It is important for hotels to give quick
response to complaints and negative comments so that they can show their point of view and also
to prove that the company took their thoughts seriously (Sardianou, E. and Kostakis, I.Ε., 2020.).
Try to help the user so that they can see your efforts and may change their mind slightly. After

giving response the company must look into the matter themselves and try to find the problem
area because of which the customer gives negative comment so that the same does not happen in
future.
Feedback: It is a important step in building the reputation of the company. Encourage
people to share their positive feedback on social media or review sites or even on major
publication (Lee, W. and Ko, Y.D., 2021.). This will help the company to spread information
about their company in the market and can be use it as a marketing activity. Positive feedback
will help the company to attract more customers and become popular in the industry. Positive
feedback will also encourage the employees of the company to work hard and increase their
motivation as well as their productivity.
Monitor competitors coverage : It is important for the company to keep a close eye on
the workings ans strategies of competitors so that effective strategies can reach to the hotel. It
will make the hotel aware of the next step of competitor and plan its activity according to that
(Sarwar, A. and Muhammad, L., 2020.). It will help the company to have competitors advantage
in the market and also will help the company to make sure that the strategies of competitors
make no harm to the hotel.
Main Body
Improvement in operations:
In the present scenario it is important for companies to improve their operations so that they not
only serve their customers well but also make sure that they are working effectively and
efficiently towards the management as well as the customers of the company. The success in the
hotel industry depends up on the timely execution. One of the biggest way to improve the
management of the company is through automated system that can keep a check on the daily
routine works and also on the staff of the hotel (Sijoria, C., Mukherjee, S. and Datta, B., 2019.).
Some of the ways in which the inter continental hotels group can improve their operations are:
Automate technological system for daily tasks: It is important for an organization that
their staff works properly and make sure that all the duties assigned to them are completed on
time (Li, Z., Duverger, P. and Yu, L., 2018.). If the organization uses pen paper system for daily
task allotments then it will not be as effective as automated system.

Streamline hotel maintenance and housekeeping process: In order to provide first
class services to the customers it is important that the hotel make sure that rooms are set up
according to the requirement of the customers, cleanliness is up to the mark, elevators, lights and
air conditioners & heaters are working properly (Lozano, J., Rey-Maquieira, J. and Sastre, F.,
2020.). The streamline process will make sure that all these are checked with lesser time as
compared to paper pen processes.
Creation of effective issue management system: A managers top priority is to handle
the issues of the hotel before it impact the guests of the hotel. The difference of the time in
between occurrence of the issue and impact on customers is the only time in which the issue
must be resolved otherwise it will create a problem afterwards (Walheer, B. and Zhang, L.,
2018.). When a company sets automated techniques for issue management, the issue will be
present on that system until it gets completely resolved. It will also lead to increase in efficiency
of the company.
Encourage teams to make decision in favour of business improvement: Staff are the
ultimate people that deals with the daily tasks and customers as well. It can be very beneficial for
the company if they encourage them to make decisions and give suggestions regarding the
improvements that can be made in the management of the company (Luchyk and et. al., 2019.).
They will bring real problems into light and also provide effective solutions for those problems.
Positive effect: Daily tasks if done through the system of automation will be able to
identify the actual person accountable for that particular duty (Cheng and et. al., 2019.). It is
important for the company to maintain a system so that honest employee can get rewards which
they deserve and make sure that punishment is given to the one who is accountable for that
specific task. By creating issue management system the company will be able to resolve the issue
within time so that they cannot impact the guests of the hotel. If issues are written on paper then
they will be piled up and then were forgotten but because of automated system the staff will be
able to analyse the issue and resolve it within time.
Negative effect: Automation can also increase the cost as upgradation or implementation
of new technology is not easy. The company needs to give training to the staff so that they can
become aware of the workings of the system so that they can handle the system effectively
(Marneros and et. al., 2021. ). Its a time consuming process as staff will require some time and

practice to get familiar to the program and to the actual workings of the system. Teams that are
making decisions may think about short term but the company needs to think about the long term
decisions so that they can save the cost that is involved. Giving decision making power to teams
will delegate the authority but will not be able to delegate the responsibility of that decision.
Management techniques
The most important asset or resource of a hotel is its staff members (Martín-Rivero and et. al.,
2021.). Employees are an important part of the organization as they are the one that are on the
floor and are actually going to deal with the customers. The employees if provide exceptional
services then it can make the hotel best one but if they are not providing average services the it
ca make best hotel into worst one. That is the reason why the company needs to hire skilled
employees and make sure that they are performing well on the floor (Goryushkina and et. al.,
2018.). The company must make sure that the employees understand that management has a
close eye on their performance and no average performance will be tolerated. Some of the things
that Inter continental Hotels Group can do in order to improve their management are given
below:
Communicate: It is an effective way to listen to the problems as well as concerns of the
employees. Miscommunication leads to misunderstanding and mistakes and no company would
want any type of mistake in their organization especially where direct services are provided to
customers and their satisfaction is all that matters. A manager must clearly communicate and
make sure that everybody completely understands what the manager is trying to say (Mehta,
M.P., Kumar, G. and Ramkumar, M., 2021.). Clear instructions, explained procedures and
address concerns are all that matters in management.
Face to face: Face to face conversations are the best as people can not only listen to
words but can also analyse the facial expressions of the speaker and make sure that they
understand the things.
Video: Video can also be a good way of expressing the matters as a picture is worth 1000
words (Goswami, S. and Sarma, M.K., 2019.). Video will also make sure that the communication
is delivered to even those who are not physically present.
Meeting: meetings are an effective way to exchange ideas and thought. In this way the
company can also receive effective feedback from the employees, listen to their concerns and
problems and can provide solution to them.