By George Turner, Chief Commercial & Technology Officer, IHG Hotels & Resorts
In my 12 years at IHG Hotels & Resorts, I’ve always had great confidence in our business model, management team and specifically our resilience. I never thought we would be tested as dramatically as we were starting in early 2020, when COVID-19 swept the world.
The pandemic has been — and continues to be — tragic. Throughout all that, I’m proud that I can say my confidence in our team was well founded. IHG effectively managed through the initial shock of COVID — including record low occupancy — and rapidly pivoted to initiatives to first and foremost make our guests, employees and hotel teams feel safe and comfortable, as well as centralize many operations and focus on digital and contactless solutions. As a result of this approach, we’ve learned a lot of important lessons that will help us continue to navigate our still-challenging environment.
Locked down, but not out
With nearly 6,000 properties in more than 100 countries, and half a million guests (pre-pandemic) each night, IHG and its hotel owners were hit hard by travel restrictions and national lockdowns. As we move into 2021 and hear news of vaccine rollouts, we cannot lose sight of the immeasurable impact COVID is having on consumers and employees worldwide — even those fortunate enough to remain healthy.
At IHG, we are still managing the day-to-day challenges of the pandemic, while simultaneously focusing on what comes next. Our rapid response was enabled by numerous factors, starting with a strong management team, trusted by investors and other stakeholders, which took a measured approach to the problem. We immediately focused on the fundamentals behind our business — our guests and owners. We also looked internally at how we could reduce our costs to get through the uncertainty of the months ahead.
A strong balance sheet meant we could take the time to evaluate the situation, and did not immediately have to furlough colleagues. Our fiscal soundness provided IHG hotel owners with an increased level of support. We halted all nonessential work and expense and were able to focus on solution delivery and enterprise security. Importantly, we leveraged data and data-driven insights in making all these decisions.
As a result, IHG finds itself well positioned for the recovery once travel flows return to a new normal.
Early days, tough decisions
In the spring of 2020, as the magnitude of COVID became clear, we faced difficult decisions — like all enterprises. Given our strength, we were able to take a more measured approach than many. Our CFO and treasury organization quickly and efficiently engaged with our supportive banks to ensure that our finances were managed in a way that aligned with the significant fall in trade all travel industry players were experiencing. We clearly had to reduce costs, which included any expenses deemed nonessential and meant cutting back drastically on agency support. We looked at all areas to find where and how we could best reduce our costs in such an uncertain environment, operating for a few months in “keep the lights on” mode.
Despite the actions we were forced to take, it’s a testament to our culture and the way we operate that feedback from our colleagues has been very positive. A recent survey of our teams found that an overwhelming majority agree that we are providing the right level of support and flexibility to our colleagues, guests and owners.
Naturally, we also made significant shifts in our operating model, with colleagues — notably 1,500 call-center team members — going virtual around the world almost overnight. Coincidentally, about 18 months ago, I spoke with our IT team about this very eventuality — call-center colleagues working remotely. But when a crisis hits, you have to find a way to push through more quickly than you might have thought possible, previously.
IHG has more than 2,000 reservations and customer care agents located across five global customer reservation offices and four partner sites, of which 1,500 transitioned to remote work. Lessons learned from our initial experiences in China allowed our teams to work quickly in other parts of the world, so our agents could work remotely and still provide a high level of service for our guests without compromising the resilience or strength of our networks.
Clean and contactless with a promise
Our colleagues make up one vital group of stakeholders. It goes without saying that our guests form another. There, too, we had to make immediate adjustments. In the wake of the pandemic, our guests’ and business clients’ top priorities shifted to cleanliness and flexibility — something that had previously been table stakes. They need to feel safe and comfortable staying in our hotels, and in this unpredictable time they had many questions about cancellations, rescheduling and refunds. We’ve ensured that guests who still need to travel or are thinking further ahead can book with confidence thanks to flexible booking/cancellation policies.
We’ve also established new cleanliness procedures and protocols: the IHG Clean Promise and the expansion of our IHG Way of Clean. Pre-COVID, no one would have thought that cleanliness would ever be one of our top marketing points — but that became the reality. Our commercial and technology teams worked collaboratively with our marketing teams to implement a new cleanliness program. Through both marketing and operations, we continue to communicate the painstaking steps we take to keep our properties clean and give our guests the reassurance they need to stay in our hotels.
Additionally, we had to find ways to make the travel process safer by limiting contact. A new digital check-in system, developed in just months, helps limit guests’ contact with the hotel team as well as provide a more seamless check-in, which will be hugely positive to our guest experience long after the pandemic is merely history. As with our work-from-home call center, the check-in system was a move we had long contemplated, but the pandemic made it a top priority.
Advocating for support
Our hotel owners are an essential part of our business, and many of our hotels are owned by small to medium enterprises. COVID’s impact on them was immediate. One of our top priorities has been to do everything we can to support our owners and help their businesses survive this crisis. For example, we reduced many of their costs by using our leverage with suppliers, relieving fees wherever possible and giving them more flexibility to meet brand standards. And we’re also constantly working with governments around the world to advocate for support and promote policies that help our owners survive the pandemic. In the US, for example, we developed resources to ensure they knew how to apply for the CARES Act and other relief.
We continue to navigate the recovery, build confidence in travel and work even harder to deliver relevant, timely and cost-effective solutions and services for our hotels. We have received positive feedback from owners on the level of support we have provided in addition to the tools and resources we created for them.
Innovating with cloud & automation
Surviving the crisis was job one. But for IHG, for others in the industry and indeed, I believe, for business in general, the challenge now is to take learnings and apply them going forward.
Technology has a huge role to play both in recovery and beyond, and we’ve shifted our approach. We have to ruthlessly prioritize to what will drive the most value, then move with speed and agility. We are focused on solutions that improve the guest experience, increase operational efficiency and speed-to-market, and increase revenue while reducing costs. To make this a reality, a strong foundation is essential. We’re investing in our cloud-based technology infrastructure, ensuring that it’s reliable, resilient and secure.
The coronavirus prompted us to accelerate adoption of automation tools and AI, especially in the revenue management area, where we’re focused on driving revenue that maximizes our and our owners’ long-term and short-term commercial performance. By making better use of historical performance data, we can better predict estimates and ultimately make decisions that drive revenue for our owners and IHG.
IHG’s revenue-management system relies on historical booking data to run demand-forecast and optimization models for recommending optimal room rates. To protect the system from a sudden shift in demand and booking patterns during the pandemic, we developed an automation tool that monitors data anomalies and improves historical booking data quality, all with an AI/machine-learning algorithm. This has never been more critical than it is now, during such a volatile and unpredictable period.
