IHG Group: Consulting Report - Hospitality Industry Challenges

This consulting report provides an executive summary of the major issues and challenges faced by InterContinental Hotels Group (IHG), a global leader in the hospitality industry. The report analyzes the impact of the COVID-19 pandemic on IHG's operations, including hygiene concerns, declining sales, and profitability, particularly in the UAE market due to increasing competition from local brands. It also addresses employee-related issues such as fair wages and working conditions. The report incorporates SWOT and PESTLE analyses to identify internal and external factors affecting IHG's performance. Recommendations include improving hygiene standards through ISO certification, implementing fair HR policies, forming strategic partnerships to enhance bookings, and adopting safety measures to address pandemic-related challenges. The report concludes with findings, results, and an action plan for implementing proposed changes.

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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industry. Other leading players in the hospitality industry bare making huge investments and
expanding their business operations in UAE market significantly because of the attractiveness of
market, low interest rates and liberal trade policies (Sahlawi and et. al., 2020).
PESTLE Analysis
Pestle analysis will help the InterContinental group in determining the several key challenges
company may face from external macro environment which have a significant impact over the
performance level and profitability of a company in long run. There are several factors which
impede the growth and success of InterContinental group ranging from political factors to the
uncontrollable weather conditions (Baporikar, 2019). Detained analysis of Political, economic,
social, technological, legal and environment factors are listed below: Political factors: These factors determine the impact it can have over InterContinental
group’s profitability and performance level in near future. These factors are concerned
with the extent to which government intervene in the relevant industry and economy.
Intercontinental group operates in hospitality industry in over 100 countries and expose
itself to the political system, regulations, policies and environment. Changes in the
government policies related with travel or imposing travel ban to specific nation can
decline the sales volume of a company. For instance, US government have very strict
norms and regulations to be able to enter into the geographical boundaries which may
affect the IHG group immediately (Dubishchev, Hryhorieva and Makarenko, 2019).
Rising attacks into a nation can also lead the government to impose travel and tourist may
travel less to that nation. However, hospitality industry is the backbone of each economy;
therefore, low interest rates to boost the industry, liberal tax policies may be beneficial
for the IHG group.
 Economic factors: Inflation rates, saving rates, foreign exchange rates, economic cycle
and interest rates are the factors which determine the attractiveness of a market, aggregate
demand and supply. InterContinental groups can be easily affected by the economic
condition of a nation. For instance, if there is recession in the market than people tend to
spend less due to the high unemployment rates, low purchasing power and high inflation
rates. Additionally, if the interest rates of a particular currency of a nation are stronger
than that of other nation than tourist are attracted towards the destination and can raise
the sales volume of a company (Baharudin and Abdullah, 2020). For instance, value of
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dollar is relatively high as compared to other nations which make the people to travel
outside the United States as they have to pay less (Jayasinghe and et. al., 2020). Social factors: These factors include the cultural trends, demographic features, buying
trends, preferences and choices, population analytics are the factors that have impact over
the business of InterContinental group. Changes in the socio-cultural factors affect the
demand of the company’s product and services. Travellers, especially millennial does not
prefer to stay in a highly luxurious hotel rather they look for a little expensive, home
environment and social place to stay to make their travel interactive and memorable
(Ghaffari and et. al., 2019). People are shifting towards the youth hostels, home stays and
community houses to get themselves indulge in the culture and language of a particular
nation. Apart from that Airbnb can be a growing concern for IHG group as they are
recognised for offering personalised stay services via mobile application and that too at a
relatively low price than that of luxurious and convenient hotels. Apart from this Hotels
run out of their inventory in peak season and customer look for a most suitable and cheap
options due to the hike in the hotel booking prices. Technological factors: Hotel industry has become more tech-savvy than before because
of the technological advancements and globalisation (Kallmuenzer, Peters and Buhalis,
2020). Intercontinental have always been at forefront at adapting to these changes and
develop innovative business practices. IHG group have shifted their operation online via
use of IHG application which enabled the customer to explore the products and services
of Intercontinental group (Copp and et. al., 2020). Application is effective in making
reservation, managing concierge services, order food, make payment and also get an
entry and exist into the hotel via use of codified bars and codes without the fear of losing
hotel keys or cards. This not all, IHG group also make use of social media platforms and
websites to promote itself, communicate with customer and maintain its global presence
(Falcone, 2019). However, apart from building the brand image, these can destroy the
brand image of the company, as customer’s review and overall experience will be viewed
and shared by other customers too. Legal factors: Legal laws, policies and regulations of a nation will determine the success
of InterContinental group of Hotels as they ensures that business run and operate in
ethical and legal way keeping the interest of the stakeholders on top (Aggarwal and Davè,
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2019). Intercontinental group strictly abide to the several laws such as discrimination
laws, employment laws, data protection, health and safety laws to ensure smooth running
of business operations. Any changes in these laws by the government will affect the
firm’s performance level (Lyapin and et. al., 2020). However, rising cases of terrorist
attacks have made it compulsory for IHG group to ensure the safety of consumers and
employees at each nation and forced them to choose location wisely while expanding the
business operations. Environment factors: Environment and weather changes have a direct impact over the
operations of InterContinental group as the severe weather and climate of particular
nations will attract fewer tourists therefore, influence the growth and profitability of a
firm in long run. Many factors which may affect the hotel operations are floods, storm,
and heavy rains, therefore it is essential for IHG group to take necessary measures and
take into account these factors while operating into different geographical boundaries
(Karbekova and et. al., 2019).
Development of reputation
Intercontinental groups of Hotel and resorts have iconic building which is spacious and
offers almost all types of rooms and restaurant services to the customers (Ademola and et. al.,
2020). IHG group is well known for their additional spaces for recreational activities such as
polo and golf grounds, tracks for horse riding, gym, swimming pool, casino and pubs due to
which people across globe prefer InterContinental brand others. Apart from this, Hotel group is
well known for their highly professional skills and expertise through which customers of
InterContinental receive exceptional quality of services and have competitive edge over others
(Melo and et. al., 2020).
MAIN BODY
Intercontinental hotels & resorts is a largest hotel chain which is established in different
countries and the services provided by the hotel are the great because of which customers wants
to come again and again(Ward, 2019). The hotel is known for the unique services which they
provide to their customers and also the arrangement which is made by the hotels for their every
customer is the best. The transportation assistance of the hotel is the best and the location in
which the hotel chain is situated is considered to be the best in the world because the view which
the customers get from their hotel rooms gives them satisfaction and the stay in the hotel is
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considered to be the most comfortable and hassle free. But Intercontinental hotels & resorts have
to face some difficulty in providing the services which are mentioned by the customers also.
Customers have given review because of the failure of providing the services which were earlier
mentioned to be provided by the hotel.
Problems
Some problems in the hotel are discussed below-
 Low quality food- The food plays a major part when the people are staying at any place.
Not just the services or the name of the hotel chain is important but what is important is
the food which is provided to the customers should be decent enough so that they can rely
on the hotel(Sachdev and Chakravarty, 2020). Intercontinental hotels & resorts have not
come up to the expectations of the customers when it comes to the food quality. In the
hotel many people come from different countries and for this the hotel must provide them
the food which is covers different cuisines but it is unable to do this. This is the reason
consumers are not satisfied with the food which the hotel provides and this thing
consumers are unsatisfied. Quality in food not only involves the cuisines which have to
be made available to the guests but it also involves the taste which the people wants while
they take their first bite. The food is tasteless and that too is delivered cold to them makes
the customers frustrated.
 COVID- 19 pandemic- This the emerging issue which is taking place in every country
and this disease has also made it important the sanitization think which was earlier taken
to be less important(Herjanto and Franklin, 2019). People are now more conscious about
the places which they are visiting and seeing that the place must cover all the things
which are required in the COVID- 19. The hotel is though taking care of all the factors
which includes the safety and precautions and providing them services. But what is
required is sanitization which has to be taken place two times a day which is not provided
by the hotel. Also the gatherings and meetings are taken place in the hotel which is not
keeping the safety of social distancing which is why the consumers does not want to go to
such hotels. Government have also made some rules regarding the obligation of the rules
which are mentioned by them for the hotels but still they are unable to provide such
safety to their consumers (Arora, 2020).
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 Meaningful experience- Consumer wants to attain good experience when they are
spending lot of money in staying(Fano and Davis, 2020). This means that the hotel has
the key responsibility in providing them the best experience but Intercontinental hotels &
resorts are unable to do so. The service which includes the room keeping service and not
having good interior designs makes the customer unhappy(DaCosta,2020). Having bed
smell in the room, room service is late and are unable to connect their devices with the
Wi-Fi are some of the issues which are faced by the guests in Intercontinental hotels &
resorts. It is the holidays for which the people books the hotel for the stay and less for
gatherings or meetings and at this time people just want to get their good experience and
nothing else(Aithal and Aithal, 2019).
 Operational issues- These issues include attending guests, operating the front desk
operations, maintain cleanliness in the hotel and other things. Intercontinental hotels &
resorts have been unable to provide such facility to the customers because they are much
focussed on the important delegates which arrives at their hotel for the stay and the staff
is working for them. They give priority to their important guests and clients and for this
they forgot the other consumers who are staying in their hotel by spending lot of money
for one night. This develops partiality with the customers and because of such bad
experience no consumer would recommend it to those people who know and this creates
the bad image of the hotel. This usually dissatisfies the customers and leads to arguments
by the manager and the consumers.
 Not having friendly staff- The major issue which the consumer is facing in the hotel is
the staffs which are not friendly at all(Love and et. al., 2018) . Intercontinental hotels &
resorts might be a big chain of hotels in different countries but the staff which they have
kept in the hotel is not friendly and does not listen to the consumers at first. It includes
the room services, housekeeping or the person who is sitting on the front desk to listen to
the problems which the guests are facing in their stay. They have not provided the best
staff in the hotel and consumers have to face the rudeness of the staff while they have to
ask anything about the service which are rendered by them.
From the above it can be said that the hotel is not bad in providing the services which are
required by the customers and they are also meeting the demands of what they want and require
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including the technology. But, there are some factors which the hotel is lacking in and they have
to make improvements in it.
Improvement Management techniques
5S- This tool will be effective for the hotel in making the organisation well and with efficiency.
This tool is helpful to create the environment which is clean, productive and safe for the
customers(Ecer, Dağdeviren and Kabak, 2019). COVID- 19 pandemic is going on and to ensure
the safety of the guests who will come and stay in the hotel makes it very important from the side
of the hotel management. This tool is helpful in bringing the efficiency and to identify the waste
and remove it from the organisations. Intercontinental hotels & resorts have to keep in mind the
5 factors to create clean and neat environment-
Sort- It includes to keep the essential items in the hotel which is important and will
keep the efficiency intact.
Set in order- This will be useful to keep the things at their designated place so that it
looks neat and tidy for the people who are coming to visit the hotel.
Shine- Now the time comes when the staff has to maintain the hotel and have to work
on the cleanliness and sanitization.
Standardize- Now the things need to be performed with standards by preparing the
charts and graphs.
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