The Holiday Inn in Six Continent

Group 4 : Aprilia Vilaning Khairunisa Dhani Arinta Ahlul Janah Ekky Sabdina Supangat Heppy Vallentina Arianingrum

dhani.arinta@yahoo.co.id

Overview
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 Nashville, in 1952 The service Holiday Inn offered appealed to the average traveler, who wanted a standardized product (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

1980 Changing business conditions and demographics saw Holiday Inn lose its market dominance 1990 Holiday Corp was renamed Holiday Inn World-wide
1990, Bass launched Holiday Inn Express 1994, Bass launched Crowne Plaza 1997, Bass created and launched a new hotel brand, Staybridge Suites by Holiday Inn

2003 Created InterContinental Hotels Group (IHG)

2000 Changed the name to Six Continents PLC

March 1998 Bass acquired the InterContinental brand, expanding into the luxury hotel market

Porters Five Forces Model

Suppliers Power LOW
Commoditized products and services Backward integration for hotel chains seeking economies of scale and scope

Buyers Power MODERATE

Low switching cost to buyers with emergence of internet and online sales Increasingly savvy travellers seek greater value for money Increasing availability of options and choices

Degree of Rivalry HIGH

Large number of players in fragmented industry Dynamic environment with rapidly changing consumer needs

Barriers to Entry LOW

Franchise model lowers cost of entry

Substitutes HIGH
Many options available for travellers

Why did Holiday Inns business model and strategies change over time?

Consumers needs Not responding to another competitive advantage Profit decreases drastically Competitive advantage of competitor

Holiday Inn Product Differentiation

Serve full services : Terrace caf restaurant Kiosk Tea tree SPA Sport lounge Room service Banquet and Convention Hall

Product differentiation contd

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?

Build the hotel industrys strongest operating system focused on the biggest markets and segments where scale really counts.

Consumer Segmentation
Luxury

Upper Upscale

Upscale

Midscale (Full Service)

Midscale (Select Service)

Budget / Economy

Luxury

Upper Upscale

Upscale

Midscale

Economy/ Budget
Limited Service Full Service

 Focus on franchising and managing hotels, rather than owning them outright
Brand Staff Marketing and distribution Third party Ownership IHG Capital IHG Income Fee % of rooms revenue

Franchised This is the largest part of our business: 3,783 hotels operate under franchise agreements Managed We manage 639 hotels worldwide

IHG

IHG

Third party

None

IHG

IHG

IHG usually supplies general manager as a minimum IHG

Third party

Low/None

Fee % of total revenue plus % of profit All revenues and profits

Owned and leased We own 15 hotels worldwide (less than 1% of our portfolio)

IHG

IHG

IHG

High

In what ways is it trying to improve its competitive advantage?

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 ???