Challenges Faced by IHG Group in the Hospitality Industry

Hospitality Industry

Executive Summary
Consulting report which is conducted further covers the major issues and challenges faced
by Inter Continental Group which is an international hospitality leader. IHG hotels have more
than 5000 properties across globe with approximately 800,000 rooms in an over 100 countries.
Emergence of COVID-19 has affected badly Hospitality industry and has interrupted the
operations of IHG group. IHC is currently dealing with maintaining the hygiene, safe and healthy
environment at hotel for the customers and employees. Another issue which IHG group is
dealing with declining sales and profitability in the UAE market due to the attractiveness of
market which is enabling the other leading hospitality leader to invest and plan for expansion in
UAE market. Additionally with the rising competition, UAE has also developed few its brand
name such as Jumeirah, Emmar and DAMAC which is a rising threat for IHG Hotels. Customer
had been complaining for poor hygiene standards at their hotels, resorts and restaurant which
have influence their brand image in market place. Apart from this, IHG hotels are also facing
criticism from employees for not providing fair and adequate living wages and unhealthy
working environment. As a part of recommendation, IHG can improve the safety and hygiene
standards through getting certified by ISO which is a benchmark to operate in an industry. In
order to improve employee turnover rate IHC may opt for a right HR polices which ensures that
employees get a fair living wage as per the economic conditions. With regards to deal with the
competition IHG group can look for a strategic partner such as “SABER” to give a boost to their
bookings in UAE and be able for face tough competition. And to keep up the pace with rapid
changing environment and deal with the pandemic challenges, IGH group of Hotels needs to opt
for a safety and hygiene measures such as regular sanitisation of the property, mask and face
shield use by customer and staff personnel, use of technology to promote contactless business
etc. Apart from this the report also covers the SWOT and PESTLE analysis to identify the
factors and challenges that may have impact over the performance of a company, issues in the
operations of Hotels and methods for the improvement. Furthermore, there is also a section for
the findings and result along with the action plan for implementing the changes and
recommendations for that.

Table of Contents
Executive Summary.......................................................................................................................2
INTRODUCTION...........................................................................................................................1
Scope and analysis..................................................................................................................1
MAIN BODY...................................................................................................................................6
Problems.................................................................................................................................7
Improvement Management techniques...................................................................................9
FINDING AND RESULTS...........................................................................................................11
ACTION PLAN.............................................................................................................................13
RECOMMENDATIONS...............................................................................................................15
CONCLUSION..............................................................................................................................16
References:.....................................................................................................................................17
Books and Journals...............................................................................................................17

INTRODUCTION
Hospitality in the service industry includes a broad range of areas such as lodging and
accommodation; food and beverages; travel and tourism, Meetings, incentives, exhibition and
conferences; themes parks etc. Prime objective of Hospitality industry is to serve the guest in a
respectable, warm and hospitable manner to make the customer experience of memorable. IHG
Hotels and Group is a British Multinational Hospitality firm, founded in the year 2003,
headquartered at Denham, Buckinghamshire, United Kingdom. Presently IHG group is operating
over 100 countries with more the 5800 hotels and 880,000 rooms, which are especially designed
to cater the needs of mainstream, upscale and luxury segments, each one built to provide great
experience which is expected by customers (Speight and et. al., 2019). The objective of the
report is to highlight the issue faced by the leadings hotel chain in United Kingdom. Pandemic
have declined the sales volume of the company due to the movement of tourist from one nation
to another and lockdown in the nations where company operates. Major issues faced by IHG are
to ensure proper health and hygiene at properties for both customers and people who are working
for IHG. Additionally, due to the standstill, employees of IGH hotels, business partners and
owners are dealing with the financial crisis and intense competition faced by IHG due to the
growth in Emirati Hospitality industry (McGinley and et. al., 2021). To maintain desired level of
hygiene at workplace IHG Hotels is providing training and new equipment to ensure rigorous
cleaning and hygiene ambience. To find out the several internal and external factors that have
lead to the decline in the sales, profitability and performance level of a company, SWOT and
PESTLE analysis is conducted. Furthermore, report also cover several operational issue faced by
the company and methods to overcome these issues and discrepancies (Perez and et. al., 2019).
There is also a findings and results based on the identified issue which is supported by action
plan to implement the changes.
Scope and analysis
Company overview
Origin of InterContinental group can be traced back to the year 1777 when Bass Brewery
was established by William Bass. Later on Company changes its name from Bass Charrington to
Crest Hotel chain, making an entry into the hospitality sector. Since then, IHG Group of Hotels
and Resorts has evolved over a period of time and has become one of the leading hospitality
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companies across globe (Gandhi and et. al., 2020). IHG has more than 5900 hotel properties
across globe, with more than 880,000 rooms making a delightful experience for the customers in
an over 100 countries. IGH have a diverse range of portfolio and have some of most luxurious
brands in its list for instance, Crowne Plaza, Holiday Inn, CandleWoods Suits, ATWELL Suites,
REGENT, Six Senses, VOCO and many more. As per the year 2020 total revenue of a company
was reported to around US$ 2.3 billion, net income approximately US$ 250 million and
operation income more than US$ 150 million. IGH group is serving to the needs of people
around the globe with a total workforce of approximately 350,000 as per the report of 2020.
SWOT Analysis
An acronym of SWOT stands for strengths, weakness, opportunities and threat, a framework
which assist and guide the individual and organisations in making strategic decisions with
regards to the business competition and project planning (Marzi and et. al., 2019). This tool is
essential for IGH group of Hotels and resorts in identifying the possible threats and areas of
improvement of the business to mitigate the risk of these factors and exploiting the opportunities
and areas of strength to have a competitive edge and improve the performance level.
Strengths: One of the major strength of IHG group of Hotel is their highly expertise and
knowledgeable workforce which is exceptionally good in delivering the quality of services, thus
making the customer experience unique and memorable (Teng, Hu and Chang, 2020).
InterContinental group is well recognised for their extensive training and learning programmes to
their employees to keep them updated and highly competitive to be able enhance the level of
performance. Another advantage for InterContinental hotel is their global presence in more than
100 countries with approximately 5800 properties and more than 880,000 rooms. One of the
most prominent brands of IHG are Holiday Inn, Crowne Plaza, Hotel Indigo, Staybridge Suites,
CandleWoods Suites etc which are committed towards providing world class luxurious services
to their customer. IHG group have intense planning for growth and expansion due to which they
have been able to succeed to enter into a new market with their skills and experience (Pinzone
and et. al., 2019). Company is successfully operating even in the unstable economy and
generating profit through new revenue streams with diversified risk associated with the
economies of scale.
Weakness: Weaknesses are those areas of which if not addressed on time may lead the
organisation in declining profitability and competitiveness in the industry. One of the major
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weaknesses of IHG group of Hotels is their poor public relations and involvement into many
controversies. Allegedly, IHG group had been criticised for not paying adequate amount of
living wages to its employees. Result of which brings dissatisfaction among employees and high
rate of employees turn over in IHG group of Hotels (Fouché and Brent, 2020). Additionally,
company had been accounted for the breach of data in more than 1200 properties, due to which
attackers had accessed to the customer’s confidential information and use of malware to clone
payment cards and make fraudulent payment. Apart from this IHG group is lacking in demand
forecasting which leads to the high rate of untapped opportunities and high rate of day’s
inventory as compared to the competitors in the hospitality Industry. All these above factors have
impacted the brand image and long term growth of the InterContinental group in future.
Opportunities: Opportunities in the SWOT analysis refers to the factors which can prove to be a
beneficial if addressed on time and can help in gaining competitive edge over other companies in
the relevant industry (Huang and et. al., 2020). New geographical markets and economies can
open up a new revenue streams and large market share for the InterContinental group. For
Instance, IHG have made the partnership agreement with SAMHI group of hotels for the
rebranding of approximately 2000 rooms to Holiday Express Hotel (BURKE, ROBINSON and
Choi, 2020). Apart from that, company is also planning to enter into the Chinese market with the
around 300 new properties. Additionally, IHG group have expanded the customer base through
making huge amount of investment on the technology and online platforms which have increased
their booking and sales revenue. Through their mobile application they have made the hassle free
hotel operations keeping all the concierge and other services at fingertips of a customer. Due the
growing demand of social distancing and contact less business, IHG’s developed mobile
application is making the customer experience more memorable and delivering personalised
services.
Threats: One of the factors that can impact the performance level of IHG group in long run is the
global crisis and instability of economic conditions (Folinas, Duquenne and Metaxas, 2020). Due
to the strike of pandemic everything came into standstill and people are restricted to move from
one nation to another which has significantly declined the profitability of IHG group across
world. Company had to cut jobs in many countries to reduce the operating cost and to maintain
its existence in the industry (Stevenson and Marintseva, 2019). Apart from this, IHG group have
been facing an intense competition in the UAE market due to the rise in the Emirati hospitality
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