The Holiday Inn in Six Continent
Group 4 : Aprilia Vilaning Khairunisa Dhani Arinta Ahlul Janah Ekky Sabdina Supangat Heppy Vallentina Arianingrum
[email protected]
Overview •
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Founder : Kemmon Wilson Holiday Inn was founded to meet the need of customers with offering motel features such as airconditioning and icemakers while keeping room rates reasonable. (product differentiation from other motels) The 1st Holiday Inn : in Memphis, the main highway to to Nashville, in 1952 The service Holiday Inn off o ffered ered appealed to the average traveler traveler,, who wanted a standardized product (a (a room) at an average price.
Growth of Holiday Inn
1957 • Wilson franchised the chain as Holiday Inn of America and it grew dramatically
1958 • there were 50 locations across the country
1959 • there were 100 Holiday Inns
1964 • there were 500 Holiday Inns
1968 • the 1000th Holiday Inn opened in San Antonio, Texas
1,233 hotels globally
Phase of Holiday Inns, Inc 1990, Bass launched Holiday Inn Express
1980 Changing business conditions and demographics saw Holiday Inn lose its market dominance
Holiday Corp was renamed “Holiday Inn World-wide”
2003
2000
March 1998
Created “InterContinental Hotels Group (IHG)”
Changed the name to “Six Continents PLC”
Bass acquired the InterContinental brand, expanding into the luxury hotel market
1990
1994, Bass launched Crowne Plaza 1997, Bass created and launched a new hotel brand, Staybridge Suites by Holiday Inn
Porter’s Five Forces Model
Suppliers’ Power LOW
Buyers’ Power MODERATE
Commoditized products and services Backward integration for hotel chains seeking economies of scale and scope
Low switching cost to buyers with emergence of internet and online sales Increasingly savvy travellers seek greater value for money
Degree of Rivalry HIGH
Increasing availability of options and choices
Large number of players in fragmented industry Dynamic environment with rapidly changing consumer needs
Barriers to Entry LOW Franchise model lowers l owers cost of entry
Substitutes HIGH Many options available for travellers
Why did Holiday Inn’s business model and strategies change over time?
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Holiday Inn – Product Diff Differentiation erentiation Serve full services : Terrace café restaurant Kiosk Tea tree SPA Sport lounge Room service Banquet and Convention Hall
Product diff differentiation erentiation cont cont’’d… Stay Connected
Free High-Speed Internet Access, Fax and Photocopy Services Bring the Family
Free to be a kid at Holiday Inn Hotels Enjoy All the Extras
Fitness centers and swimming pools
What are the strategies behind the Six Continents Hotels current business model?
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Build the hotel industry’s strongest operating system focused on the biggest markets and segments where scale really counts.
Consumer Segment Segmentation ation Luxury
Upper Upscale
Upscale
Midscale (Full Service)
Midscale (Select Service)
Budget / Economy
Luxury
Upper Upscale
Upscale
Midscale
Economy/ Budget Limited Service
Full Service
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Focus on franchising and managing hotels, rather than owning them outright Brand
Staff
Marketing and distribution
Ownership
IHG Capital
IHG Income
Franchised This is the largest part of our business: 3,783 hotels operate under franchise agreements
IHG
IHG
Third party
Third party
None
Fee % of rooms revenue
Managed We manage 639 hotels worldwide
IHG
IHG
IHG usually supplies general manager as a minimum
Third party
Low/None
Fee % of total revenue plus % of profit
Owned and leased We own 15 hotels worldwide (less than 1% of our portfolio)
IHG
IHG
IHG
IHG
High
All revenues and profits
In what ways is it trying to improve its competitive advantage?
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Building strongly differentiated brands that ensure we capture a high share of those people who say that brands influence their choice of hotel
InterContinental Hotels and Resorts
→ high quality, enjoyment of their stay Crowne Plaza Hotels and Resorts → offering state-of-the-art business and meeting facilities Holiday Inn and Holiday Inn Express → brand family Hotel Indigo → boutique and youngest brand Staybridge Suites and Candlewood Suites → for guests on longer trips
Question ???