BTN's annual answer book for business travel managers.
IHG CEO Keith Barr Discusses plans for:
InterContinental Hotels Group CEO Keith Barr assumed his new
role as head executive on July 1, stepping up from his prior position as chief
commercial officer. But already Barr has ambitious plans for IHG. He spoke with
BTN lodging editor Julie Sickel.
BTN: What's been your first priority since
stepping into your new role?
Barr: My travel
schedule in the last few weeks has been getting out and talking to owners and
colleagues. I've spoken to close to 1,200 of our top managers in all four
markets [the Americas, Greater China, Europe and Asia, the Middle East and
Africa]. I've also spent a great deal of time with owners, getting a bit of our
message out but also listening to them. My message has been about an incredibly
sharp company performing well, but how do we accelerate our growth and become
an even stronger company going forward? I like to say I know the plumbing and
wiring of this company better than anyone; I've been with it for 25 years. I've
worked all around the world, held some corporate roles, market roles, but I
recognize the need to lean into our teams to understand what are some things we
can do better. How can we do things faster, more agile? Also, what are some of
the great things we're doing today that we should be sharing more actively
BTN: Is it too early to say what the biggest
surprise has been from those conversations?
surprised me was the appetite for change. We've had an incredible decade of
performance, one of the top performers in the industry. We've grown to 5,200
hotels [and] 1,500 in the pipeline, and our share of the pipeline continues to
grow. There's really positive momentum; people think we can get better. It
caught me off guard a little bit. I thought I might have to be pushing to drive
for change. It's easy when the building's on fire for people to go, "Yep,
we've got to do something." But when you've had this strong track record
of success, getting people to say, "You know what? We could do this really
differently. I'm up for it."
BTN: Where are the opportunities for IHG to be
critical for the business. We are piloting and then will be launching at scale
our new central reservation system, GRS, next year. We will have all of our
hotels on GRS by early 2019. That is such a flexible platform and an
industry-leading platform that we can continue to enhance in delivering new
functionality and capability. We've completely re-architected our entire
technology infrastructure, moved to a services-based architecture. We're now
laying GRS on top of that. It's just going to let us do so many things that
have been so hard to do in the past. Often, we come up with a great idea that a
corporate client wants us to do or something that we want to do and you go, "Oh,
that's just really hard," because of the technology, because we have
legacy systems. We're getting rid of all of that. We're kind of on the cusp of
having that, so we can just be much more agile and can try new things and
partner in different ways and distribute room inventory and distribute
attributes and packages and groups and meetings. All that will be coming over
the years to come.
BTN: In that same vein of technology, are you
getting into the space of mobile check-in, mobile keys, beacons, etc.?
Barr: The big
thing we've been doing this year has been check-out. My view of technology is:
How do you use technology to remove friction and pain points on the customer
journey? Check-out was the thing we decided to lean into this year. We've got
it in 2,600 hotels. We've got real-time folio review so you can check out, it
emails it to you or to your system so you can look at your bill. Done. We've
just started rolling it out this year, and we've already had 250,000 check-outs
and it will scale up. We've piloted beacons, and we're already doing things
around that. Mobile key is in our road map; we're installing mobile key-enabled
door locks, but it's not high on my list right now. We piloted it and the usage
was really low. We started doing check-out and usage is really high.
We're also leaning heavily into Wi-Fi this year through our
IHG Connect platform. That's solving the pain point of poor quality broadband
and it enables us to be able to do things in the future like Internet
entertainment and building all that capability, too. The industry can sometimes
be focused on technology for technology's sake; you have to start with the
customer and the things that they really want to be able to do.
The industry can sometimes be focused on technology for technology's sake; you have to start with the customer and the things that they really want to be able to do."
BTN: How did you come up with the design and
features for your new midscale brand Avid? It's quite restrained compared to
some of the other brands coming into this space.
Barr: Well, for
one thing, it's not a demographically targeted brand; it's a consumer-need
targeted brand. We did a significant customer-need segmentation and demand
analysis in the U.S. and Asia. We talked to a lot of people who travel in this
space and said, "What are the core things you're not getting today?"
There's a $20 billion dollar revenue segment, 14 million customers who today
are basically underserved by existing brands. What you hear from them is, "I
shop regularly at a certain price point and I'm trying to figure out: Is this a
good hotel in that brand or a bad hotel in that brand, because there's no
consistency." People were traveling with hair dryers ... with their own
cleaning supplies. With Avid, it's a smaller guest room, 230-square feet to
270-square feet. You've got a simple grab-and-go breakfast, not a hot
breakfast. It's a very sleek, efficiently designed guest room; clean; light;
bright; great bath and shower experience. The design is all about sleep so we've
got some of the latest noise-reduction technology. We already have 150
expressions of interest, and it will be the next brand of scale for us.
BTN: In terms of development, is the main focus
still on China, or is another region catching your eye?
Barr: Each region is in a different cycle. The U.S.
is a significant portion of the company's profit in the Americas. China is the
other big bookend of growth for us. When I went to China in 2008, we were at
100 hotels. I built the strategy to grow our China business, and when I left in
2013, we were at 200 hotels. We recently surpassed 300 hotels and now have 250
in the pipeline. We've just launched franchising for Holiday Inn Express and
have 50 hotels franchising, so you've seen that business accelerate. But we've
been very thoughtful about building a healthy business there and learning from
all the things we've done well around the world and all the mistakes we've made
over the last 50 years and not repeating them there. We mapped out for the top
100 cities in China what we believe the next 20 years looks like in terms of
their development, which brand should go to market when and in what sequence.
We haven't always got it right, but we've got it right more often than not. The
brand portfolio is exceptionally strong.
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