INTERCONTINENTAL HOTEL GROUP

Innovative Strategic Direction Options For Intercontinental Hotel Group

Innovative Strategic Direction Options For Intercontinental Hotel Group

Introduction

InterContinental Hotels Group (IHG) is an worldwide hotel company which works several hotels across 100 territories and countries . IHG operates its hotels under 07 brands, Crowne Plaza, Hotel Indigo, Holiday Inn, InterContinental, Staybridge Suites, Candlewood Suites and Holiday Inn Express. This paper discusses Innovative Options For Future Strategic Direction And Their Clear Implementation Plans for Intercontinental Hotel Group.

Discussion

Hospitality firms like IHG were pioneers in globalization. From cautious expansion before the 1970s to rapid growth by the early 2000s, international reach continues. One of the outcomes of increasing internationalization is that countries are economically interconnected at an unprecedented level. The evolving economic structures of countries help explain the stages of hotel development. For example, as a country grows and builds commerce, demand for hotels in secondary markets accelerates. Among the most popular reasons companies make foreign investments are to search for new markets or better resources, increase efficiency, reduce risk, or counter the competition. (Young 2009, 163) This paper provides innovative strategic direction options for Intercontinental Hotel Group that maybe used as a future strategy. (Porter 2009, 9-40)

Strategic Direction Options

Expansion in Arab Region

Middle East is one of the regions where IHG?s presence can grow. It can start its operations in more markets in the region, with Saudi Arabia being a major focus from a short-term perspective.

Saudi Arabia has a very resilient tourism industry, which is based on religious and domestic tourism, both of which are not easily impacted.

IHG must plan to have several openings in six markets in the region among which are Saudi Arabia, Kuwait, Qatar, Jordan and Bahrain.

Introduce A New Brand In The Region

The company can introduce a new brand to key cities in the region in 2012. Major destinations expected to be part of this launch are countries such as the United Arab Emirates and Saudi Arabia.

Corporate sources reveal that the brand will be positioned within the upscale pricing range. As luxury demand takes a new direction in the region a strong trend towards individuality and family orientation is identified, which triggers the popularity of boutique hotels.

This is a trend which IHG aims to explore and achieve competitive advantages through the Hotel Indigo brand. (Young 2009, 163)

Strengthening exposure in Russia

IHG must strengthen its exposure in Russia. Russia is a fast growing market with huge forthcoming sports events such as the 2014 Winter Olympics in Sochi and the 2018 FIFA World Cup, which represent an appealing investment destination for hotel operators. (Yip 2002, 93)

IHG must be capitalising on these trends by strengthening its exposure in the country.

The company must plan to launch its Indigo brand in Russia, particularly in St. Petersburg and Moscow, by summer 2012.The goal will also be to have more than 100 hotels opened by 2020, with a particular focus on brands such as Crowne Plaza and Holiday Inn.

IHG has 11 hotels in the country at present ...