IHG seeks to expand Holiday Inn’s Portfolio in South India.
IHG has been able to maintain a diverse portfolio despite global turmoil in the tourism industry. In 2020 IHG opened 90 new hotels over the first half of 2020 and signed deals for 181 more, including nearly 100 Holiday Inns, company leaders. “As you can see, while we’ve been dealing with our response to Covid-19, we remain focused on our future growth as travel returns,” IHG CEO Keith Barr said during an earnings call. “We continue to open and sign hotels weekly, and, in some markets, we’re discussing deals more than ever before.” (Shanker Rai, 2009) IHG centered its optimistic growth outlook around what company leaders label their mainstream brands, a 5,022-hotel portfolio of Holiday Inn, Staybridge Suites, and Candlewood Suites.
Below is a SWOT analysis based on data from the India Tourism Report Quarterly Reports in 2020. This SWOT analysis discusses drawbacks, opportunities, and potential threats that should be considered in expanding in India.
Benefits of IHG’s Expansion in India
In a recent publication, Economic Times – India Times, IHG Hotels & Resorts, South-West Asia Managing Director Sudeep Jain shared his thought on the potential growth in India. “IHG is well-positioned to capitalize on the market demand and is meaningfully expanding its presence across key markets in the country with new signings and openings” (Sinha, 2019)
As stated in the SWOT analysis, one of the tourism strengths in India that is in line with some of IHG’s goals with growth is luxury accommodation. IHG may preset global brands like Regent Hotels and Resorts, Kimpton Hotels and Restaurants, and voco Hotels. Those elite brands have potential in India, and introducing these brands with the right partners, at the right location, and at the right time would provide diverse options for travelers. IHG can present a luxury experience while delivering a personalized tech-based experience that international travelers would appreciate. Investing in technology can improve the efficiency of operations and customer experience. Artificial Intelligence and machine learning are assisting travel companies in offering personalized suggestions. The better the incident, the more likely they will use the same service again.
Individual travelers won’t be looking for ‘One-size-fits-all travel.’ Each tourist member has personal preferences, and they are interested in trying different activities. (Sinha, 2019) Driven by technology, the customer has begun to expect a hassle-free experience in every aspect of travel. Everything from booking to the completion of the trip needs to be as pleasant as possible.
The growth of the tourism and hospitality sector in India has been primarily driven by domestic demand. Furthermore, with international movement still being restricted, domestic tourism is gaining even more traction. The government is heavily supportive of the tourism industry, which bodes well for long-term growth. (20F Report, 2021)The country is implementing new tourism policies that include infrastructure development to boost connectivity, such as developing the cruise industry and creating new air routes. Overseas marketing campaigns are contributing to growth alongside the development of niche tourism markets.
References
20F Report, I. (2021). Annual Report and Form 20-F 2020 True Hospitality for Good. https://development.ihg.com/-/media/ihg/annualreports/2020report/pdf/ar-report-2020/ihg_2020ar.pdf
Shanker Rai, S. (2009, April 2). IHG Continues Strategic Expansion. InterContinental Hotels Group PLC; InterContinental Hotels Group PLC. https://www.ihgplc.com/news-and-media/news-releases/2009/ihg-continues-strategic-expansion-and-growth-momentum-in-india-with-31-hotels-in-the-pipeline
Sinha, S. (2019, November 6). IHG plans to increase luxe footprints in India – Times of India. The Times of India. https://timesofindia.indiatimes.com/business/india-business/ihg-plans-to-increase-luxe-footprints-in-india/articleshow/71931622.cms