Comprehensive Analysis of the IHG Group in Hospitality

This report provides a comprehensive analysis of the InterContinental Hotels Group (IHG) within the hospitality industry. It begins by defining hospitality and outlining the types of businesses operating in the sector, including entertainment, travel and tourism, food and beverage, and lodging and acco...Read More

Contemporary Hospitality
Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Types of business that operates in Hospitality industry.........................................................1
P2 Functional and operational departments of hospitality business...........................................2
P3 Contribution of hospitality industry in local, national and inter-national economy..............3
TASK 2............................................................................................................................................4
P4 Types of operational roles within hospitality industry..........................................................4
P5 Skill that are required to perform the role in hospitality industry and their shortage............5
TASK 3 ...........................................................................................................................................6
P6 PESTLE analysis of IHG group that affect on their development.........................................6
P7 SWOT Analysis on Intercontinental and it impact on decision-making...............................7
TASK 4............................................................................................................................................8
P8 Implications of current and potential trends in the hospitality industry...............................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The term hospitality can be defined as relationship between host and guest. In which host
play the major role of welcoming and entertaining the paying guest or customers. Hospitality
services operates the business of amusing clients, managing and organising conference meetings
etc. The major area that are covered by hospitality sector is welcoming the guest by offering
them food, safety and shelter. The organisation chosen for this assignment is Inter Continental
Group which operates its business in hospitality sector. It is a British inter-national hospitality
organisation which headquartered is situated in Denham, England. IHG is operating their
business operations in Asia, Europe and Korea. This reports covers the business that are operate
under hospitality industry. Moreover essential skills that are needed to complete the role in
service sector. At last PESTLE and SWOT will be covered in context of hospitality industry for
this report.
P1 Types of business that operates in Hospitality industry
Entertainment industry- In the hospitality sector entertainment industry is a key category
which determines that it is the most important business activity of hospitality business. This
factors relates to entertain guest or customers. In context of IHG, top management formulate
strategy through which they make the travelling experience of customers with fun and
entertainment like Marinas, cruise etc. are some ways through which clients of IHG move from
one place to another (Aragon-Correa and et. al., 2015).
Travel and tourism sector- In present scenario travelling is considered similar as
hospitality industry. This sector is huge sector for service sector specifically in IHG or any
another hotel. Usually it includes trains, ships, airlines etc. In context of Inter Continental hotels
they had divided travelling into two sector. In which first is for formal as they provide this
services to individuals such as business man and managers. While other is In-formal it is for
those people who travels for one destination to other with the purpose of holidays, relax etc.
which helps them to cover more area of business.
Food & Beverage- This is the crucial factor that involves food management, restaurants,
catering business and snacks etc. In this case these division is divided into two sectors which
includes preparation and transportation of food. This is crucial factor for hospitality business
because in this products are offers to customers. As for IHG food department they serve food to
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customers with creative presentation that attract customers which govern that food and dining
factors are important for hospitality organisation.
Lodging and accommodation- The lodging sector of hospitality business is very board it
includes hotels and resorts etc. which included under lodging services. Similar accommodation
sector is very huge in which relax, comfort and high class amenities are included under this
sector. IHG group is providing these services among overall world which determines that they
has similar goodwill in overall world.
P2 Functional and operational departments of hospitality business
Each and every organisation several departments which complete their work in order to
achieve the goals and objectives for an organisation. Some operational and functional
departments that work for IHG groups are given below.
Operational department- Operation manager and officer are concerned in order to design
and control of business activities. Several departments that work under operational department is
as follow: Front desk services- Each organisation that operates business in hotel industry has to
execute front desk. This employees or persons are those who interacted with customers
constantly. In context of IHG group this management has high skilled employees that
perform and fulfil role of Front desk service which signify importance of front desk. Housekeeping- IHG hotel has to perform this task with more efficiency because it is
essential for them. It helps them to attract more customers by keep their room clean and
hygiene. Customers are more attracted towards hotels if management keep tidy and neat
the floors and rooms of hotel (Baum, 2015).
Functional department- The functional department of IHG includes marketing,
accounting, human resource department etc. These section of an organisation perform their work
to increasing the productivity of their operational activities. HR department- HR Officer or manager plays an essential role for recruiting capable
employees that work as an asset for the organisation. In context of IHG and their brand
image it is important for them to recruit capable employees. Like professional and
skilled employees helps organisation to deliver effective services to customers or guest
which govern that humans are essential part for an organisation.
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 Accounting- It is the responsibility of accounting department to maintain the records of
all financial transaction that take place in the organisation. Financial team is responsible
to monitor and control all financial transaction of organisation. Like account department
of IHG prepare several accounts which includes profit & loss account, cash and fund
flow statement through which they attract more investors this signify that finance is most
important part for business (Dehe and Bamford, 2017).
P3 Contribution of hospitality industry in local, national and inter-national economy
Hospitality industry is growing day by day with rapid face which signify that they
establish themselves as backbone of country. Some aspect which show contribution of
hospitality business in economy of country is as follow:
Contribution in local economy- Economic condition of local society and market is
improved through the support of IHG hotel. Like they generated employment opportunity and
business opportunities for individuals. Along with this they contribute in developing
infrastructure of country by paying tax to the ruling government.
Contribution in national economy- The economic factors includes laws and legislation,
policy that directly impact or relate with the monetary policy of an organisation. In these several
other business are included like restaurant and bars etc. IHG and other hotels increase the annual
growth with 4.9% by attracting or bringing more number of guest which results that 70 million
tourist travels towards UK. Similar as local economy hospitality sector increased employment
rate with 10% that increase purchasing power of customers (Dhiman, 2012).
Contribution in global economy- According to British Hospitality Association there are
more than 5,00,00 employees are working at global level as IHG is operating their business
among overall world. Along with these they bring foreign exchange in country. Along with these
it increases import export rates through which trade activities also increased in society. Further
management of IHG group also signed different licensing and franchising through which growth
they expand their business at global level.
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TASK 2
P4 Types of operational roles within hospitality industry
In hospitality industry operational manager plays a vital role because there suggestions
impacts on the decisions of upper level management. Some roles that are performed by
operational manager are given below: Role of receptionist- They work as bridge between the all sections of company. For this
they collect information from all individuals which includes customers, employees and
staff of company. In context of hospitality industry and service sector receptionist plays
administrative role in the organisation because they are first person who communicate
with customers. Role of division manager- It is the responsibility of division manager to guide employees
who are working in the front area of hotel (Findlay and McCollum, 2013). Division
manager interact and coordinate with other departments of organisation to provide better
services to visitors and customers. The major role that is performed by division manager
is to formulates the budget for organisation. Operation head of IHG group maintain staff,
supervising rooms and developing monthly plans which determines that they helps an
organisation to complete their activities. Role of food department- IHG has large variety of products and service range that they
deliver and offer to their customers. It includes large variety of food also. In this the
major role is performed by food department and kitchen staff through which determines
that food is important factor for hospitality. Like it is essential for IHG hotel that they
recruit skilled employees for kitchen because they are offering food and room both to
their customers (Kim and Park, 2013).
 Marketing and sales- Each and every organisation requires promotion for this marketing
team plays an essential role through which they convert prospects into leads. In context
of IHG marketing team perform the major role through which they converts an individual
into paying guest which determines that organisation has competent employee's which
increases the brand image of organisation. Apart from this marketing team plays an
significant role such as creative advertising through social media in order to increase the
sale of their products and services.
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P5 Skill that are required to perform the role in hospitality industry and their shortage
In hospitality sector large number of employees are working together that belong to
different background. For this management of IGH define some skills that work as benchmark
for them. This task covers some skills that are needed in an employee of services sector. Commitment- To become an successful employee in each industry commitment is more
necessary for an individual in context of IHG they need to recruit those employees that
committed themselves fully for the organisation. This results that organisation earn
more revenues with the involvement of staff. In present scenario employees does not
commit themselves for an organisation because they has more alternatives to switch on
other job (Lambert and Sponem, 2012). Communication skill- In hospitality industry the most beneficial skill to achieve success
is communication. An individual who communicate with others effectively through oral
and written generates more sales for the organisation. In context of IHG the HR
management provide training and development through seminar, work-shops etc. to
their employees which helps them to increase their skills and personality. Through this it
increases the productivity and performance of an organisation. Enthusiasm- In an hospitality industry it is necessary for employee to work with energy
because it is the job which is open for all hours and whole day. In context of IHG group
they manage and organise their business through motivating their employees which
signify that they sustain their business in market by improving quality of services. Now
a days employees are not influenced to complete the work. Like they are not regular on
their job, slow services etc. are the factors that create negative results on organisation.
 Organized- The present condition of hospitality industry is better which generates lot of
opportunities to complete their work. In context of IHG hotel they are generating
necessary modification in their activities in order to complete their activities in
sequential manner. For present employee they has less skills like their concept are not
clear to perform the job (Lolli, 2013).
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TASK 3
P6 PESTLE analysis of IHG group that affect on their development
PESTLE analysis is a method through which organisation identifies that which
environmental factors impact on business.
Political factor- Political factors include rules and regulations, policy and plans that are
formulated by ruling government of country. In context of hospitality sector it involves the anti-
trust law and taxation policy of country in which they operate their business. IHG hotels always
complete their work under the formulate rules of government such as to protect their intellectual
property and natural resources.
Economical factor- Monetary factors such as inflation rate, savings and interest rate and
foreign exchange of company are included under economical factor. In context of IHG
management identify the economical stability of country. Apart from this it also helps to identify
exchange rate between two countries.
Social factor- Society culture and the way of performing different activities that is
performed by an individual are under social factor of an organisation. The particular of society of
an country share similar beliefs, attitude and value. The management of IHG need to understand
the customers of each society to design their message effectively by which it is easy to generate
interest among society (Pirani and Arafat, 2014).
Technological factor- Innovation and technology are the major factor that impacts on the
business operations of an organisation. Some recent trends that are generated by IHG group is
product offering which helps to increase more value in their products. This results that
management expand their business in other areas of countries also.
Environmental factors- Different countries has different norms and standards relates to
their environmental policy through which they protect their natural resources. Inter Continental
Group maintain organise different CSR activities through which they increase goodwill in
market it helps to increase their customer base.
Legal factors- Countries which are at developing stage are not formulated strict
framework to complete to bring more investment in country. For this IHG explore ways through
which they gain competitive advantage to open their venture in those countries also this create
positive results for organisation by filling less number of formalities.
PESTLE analysis for travel-lodge
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Political factor- All the policy, rules, regulation that are formulated by government are
included in political factor. It includes tax policy, foreign exchange policy etc. Travel-lodge
executed this laws strictly in the organisation to perform their operation effectively in the
organisation.
Economical factor- The term economic includes all factors which impacts on monetary
policy of organisation. Like travel-lodge is operating their business in UK which is a developed
country so there economy is stable. It helps them to provide effective services to their customers.
Social factor- Each and every organisation is operating their business to earn profits by
satisfy the demand of customers. It governs that society play crucial role in organisation
therefore it travel-lodge need to perform their activities through analysing that their operations
will not negatively impact on society.
Technological factor- The term technology is impacting on all operations of market
which determines that it is covering several aspects of business. Travel-lodge invested good
amount in purchasing new technology. This helps them to gain competitive advantages in
industry among their rivals.
Environmental factor- In present scenario countries are aware about safety of their
environment it determines that safety of environment is essential for each country. It helps them
to save their natural resources due to which more customers are attracted towards their country.'
Legal factor- Laws such employment law, consumer law etc. and policy such legal
policy and nominations are the major factor that impact on business and its operations. Therefore
it is essential for travel-lodge to follow all laws due to complete their operations in ethical way.
P7 SWOT Analysis on Intercontinental and it impact on decision-making
Every organisations operated at global level such as Intercontinental Hotel Group should
identify their strengths and weaknesses along with the threats and opporunties which makes easy
for the management to make corrective actions and suitable plans in order to achieve
organisational goals and objectives.
Strengths-
Profitability- The profitability of the group is increasing and there is a increase in revenue of the
group from $69m to $1,784m till the end of 31 December 2017
(https://www.howandwhat.net/swot-analysis-intercontinental-hotels-group-plc/) This hotel
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group posses strong growth rate and has highest number of hotels which allows them to earn
more revenue.
Global presence- This group of hotel is expanded in 100 Countries and one of the leading
organisation in industry. (https://www.howandwhat.net/swot-analysis-intercontinental-
hotels-group-plc/) their main brand are Intercontinental,Hualuxe, kimpton and IHG is
recognised as having largest number of rooms which makes it recognised globally.
Effective recruitment strategies- The group of hotels has a recruitment strategy formed by HR
generalist and redefining functions of operational and functional department which
eliminates bureaucracy and delays of recruitment.
Weaknesses- Weak IT security- The IT security of this hotel is weak as 1200 hotels were hacked and
all information of guest related to card number, cardholder name, internal verification
were stolen which results in more negative views (Sayadi and et. al., 2012).
 IGH Rewards club- The group loyalty program conducted for customer resulted in
numerous negative views of customer. It was argued that points which were mentioned
was not provided by them. The point got expired when tried for redemption.
Opportunities- New geographical market- The partnership of this company with another company like
china as the hotel is planning to start 300 new hotel in china within the next five years.
(https://www.howandwhat.net/swot-analysis-intercontinental-hotels-group-plc/) which
will result in high level of branding of the company.
 Technology Facilitated Booking- The company has invested huge fund in technology or
online platform. This results in higher revenue due to higher sales and in next five year
company will grab the opportunity by understanding customer better and fulfilling their
needs (Sherbaz and Duan, 2012).
Threats- Competitor- The competitors are the biggest threat for the company who are Marriott,
Wyndham and Accor Hotels as their strategies affects the external environment of
industry.
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 Hotel recruitment in china (https://www.howandwhat.net/swot-analysis-
intercontinental-hotels-group-plc/) - The expansion in china is a big challenge as there are
less people who want to work in this sector where skill and training gap are present.
SWOT analysis of travel-lodge
Strengths
 Travel-lodge provides different their rooms for all segments of customers. It increases
their strength through providing their services to most customers.
 Organisation developed positive relations with their customers and partners which helps
to increase their goodwill in market. Travel-lodge established their hotels among overall world due to the market size of them
is expanded day by day.
Weaknesses
 Large number of hotels are managed by travel-lodge therefore its structure is complex
and rigid that stop business to adopt changes quickly.
 Management tie up with small and medium sized hotel due to which its image is
impacted as they are not able to match with standard of travel-lodge. The organisation is increasing their number of customers but it also difficult for them to
complete their operations in specified period.
Opportunities
 Travel-lodge is expanding their business at global level which helps them to enter in
those area which are not explored by hotel industry.
 Environment safety helps travel-lodge to promote their activities by organising different
CSR activities. Most of the individuals in present scenario are travelling form one place to visit other
countries. Therefore it increases the probability for hotels to attract more customers.
Threats
 Most of the customers that stay in travel-lodge are most of the UK due to ehich others
areas are not discovered by management.
 Their is high competition is exist in the hospitality industry of UK which determines
local as well inter-national organisation both operates their business in hotels.
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 High competition in market of UK decrease the profits of organisation because all rivals
give competition to them on price factors.
Factors affecting supply and demand
Demand and supply of intercontinental group is affected if they not adopt new changes
that are required by the organisation in order to fulfil the demand of customers. For this they
forecast essential factors of organisation due to which it is easy to fulfil demand of customers.
In context of travel-lodge the analysis of their strength and weakness helps them to
complete their goals through direct approach. Like little changes impact on organisation and its
operations.
Influence of SWOT in decision-making-
The SWOT influences the process of decision-making as the company can analyse their
strengths to increase value of strengths, weaknesses to overcome from them, opportunities to
grab and threats to make strategies related to this. The long term strategies are formed by
specialist can be made according to the information and performed to overcome weakness and
remove threats. It allows manager to form a vision and present the same for clarity of goals. It
helps IGH in planning more strategic decision for the company which result in less amount of
time and less effort and assures effective utilisation of resources (Townsend, Wilkinson and
Burgess, 2014). This tool also help in removing Risk through analysing strengths and using it
efficiently and effectively. The opportunities present in the environment becomes easy to grab
and decision formation regarding this become reliable and expansion and growth can be
achieved.
TASK 4
P8 Implications of current and potential trends in the hospitality industry
Some trends that are included under hospitality sector are mention as follow that help to
sustain for longer period in market.
Global visitor- In present all countries are inter-relate with each other such as through by
trade activities or exchange of services. IHG is managing their hotels in Asia, Europe, Korea etc.
In recent years the trend of inter-national travelling is also increased which bring customers from
different countries. For this IHG trained their employees in understanding different language
through which effective communication take place between host and guest.
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Technology- The impact of technology has been seen in all business which regularly
brings updates in product or service sector. IHG brings modification in their hotel like high
speed internet, doors with artificial intelligence etc. that attract more customers in society. This
improve infrastructure of company (Wilson, Murphy and Fierro, 2012).
Environmental factors- this is upcoming trend that brings changes in the trend of
hospitality business. Like now a days countries follow strict rules to protect their environment
which determines that they are aware to protect their natural resources and property. Example-
The ruling government of Europe organise and implement different CSR practice in which they
aware to produce those resources that are easy to recycle.
Restaurant- In present scenario organisation which are operating their business in
hospitality industry are also opening different restaurant that attract customer. It helps them to
increase their profits and number of customers.
Booking- It is the most important factor that helps customers to book their
accommodation on already basis. These helps an organisation to increase the volume of their
customers.
Generation- In present scenario all needs of the customers are difficult to match by the
organisation. It determines that change in technology, generation, location etc. creates problems
for them due to which there is regular change in needs.
At last it is essential for organisation to follow their goals so they are managed and
accomplished within minimum time period. Along with these it helps to increase the profits and
productivity of their organisation by putting their efforts parallel to the trends that help to
achieve their objective.
CONCLUSION
According to the above report it is concluded that several business are introduced in
hospitality sector that provide effective services to guest and customer. In service sector different
types of operational and functional departments are mention which help an organisation to
complete their business in complex situations. In today era hospitality industry is growing
constantly which help to work them as backbone of economy of country. At last some skills are
mention that are needed in an employee to perform their job role.
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REFERENCES
Books and Journals
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strategies: Analytical review and future directions. International Journal of
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Baum, T., 2015. Human resources in tourism: Still waiting for change?–A 2015 reprise. Tourism
Management. 50. pp.204-212.
Dehe, B. and Bamford, D., 2017. Quality Function Deployment and operational design
decisions–a healthcare infrastructure development case study. Production Planning &
Control. 28(14). pp.1177-1192.
Dhiman, M.C., 2012. Employers' perceptions about tourism management employability
skills. Anatolia. 23(3). pp.359-372.
Findlay, A. and McCollum, D., 2013. Recruitment and employment regimes: Migrant labour
channels in the UK's rural agribusiness sector, from accession to recession. Journal of
Rural Studies. 30. pp.10-19.
Kim, H.B. and Park, E.J., 2013. The role of social experience in undergraduates’ career
perceptions through internships. Journal of Hospitality, Leisure, Sport & Tourism
Education. 12(1). pp.70-78.
Lambert, C. and Sponem, S., 2012. Roles, authority and involvement of the management
accounting function: a multiple case-study perspective. European Accounting
Review. 21(3). pp.565-589.
Lolli, J.C., 2013. Interpersonal communication skills and the young hospitality leader: Are they
prepared?. International Journal of Hospitality Management. 32. pp.295-298.
Pirani, S.I. and Arafat, H.A., 2014. Solid waste management in the hospitality industry: A
review. Journal of environmental management. 146. pp.320-336.
Sayadi, A.R and et. al., 2012. Estimating capital and operational costs of backhoe
shovels. Journal of Civil engineering and management. 18(3). pp.378-385.
Sherbaz, S. and Duan, W., 2012. Operational options for green ships. Journal of Marine Science
and Application. 11(3). pp.335-340.
Townsend, K., Wilkinson, A. and Burgess, J., 2014. Routes to partial success: Collaborative
employment relations and employee engagement. The international journal of human
resource management. 25(6). pp.915-930.
Wilson, A., Murphy, H. and Fierro, J.C., 2012. Hospitality and travel: The nature and
implications of user-generated content. Cornell hospitality quarterly. 53(3). pp.220-228.
Online
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