John Bamsey, chief operating officer, India, Middle East & Africa, InterContinental Hotels Group (IHG) assess the challenges ahead in 2012 and reveals how IHG is planning to tackle these with new openings in new markets, robust loyalty schemes and strategic digital marketing.
What will be IHG's priorities in 2012?
Guest satisfaction is always top of the list for us — if our guests love staying with us they will return time and time again. So it’s critical that we constantly deliver a great service by understanding what our guests want in the first place and ensuring we deliver this every time they stay. Along with guest satisfaction we are focused on increasing the number of members of our loyalty programme, Priority Club Rewards. We currently have 61 million members worldwide and the number of members in the Middle East is growing every month.
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We will continue to focus on growth — increasing the number of hotels that our guests can choose from and introducing new brands to our markets. We currently operate across ten countries in the Middle East and assess each development opportunity as they arrive. In the short term the impact of the Arab Spring and instability in some markets is increasing our focus on Saudi Arabia where we are already the market leader, and emerging markets like India and African countries. In 2012 we will open our first hotel in Nigeria — the InterContinental Lagos and our first Holiday Inn Express in India. Early in 2012 we anticipate announcing the first Hotel Indigo due to open in the Middle East.
In April 2011 we partnered with Duet India Hotels Group to develop 19 Holiday Inn Express hotels across India by 2016. So India is going to be front and centre for us over the coming years. The first of the hotels with Duet is expected to open next year, and we will be continuing to ramping up business there as we head towards having a total of 150 hotels in India within 8 years.
What new openings do you have on track for 2012?
We have several openings due across six countries in the Middle East. For example we’ll be expanding our presence in Qatar with InterContinental Doha The City and Crowne Plaza Doha The Business Park. In Saudi Arabia we will open two new hotels including our first Crowne Plaza in Medinah and our sixth hotel in Riyadh (Holiday Inn Riyadh Meydan) and in Jordan we are due to open the Crowne Plaza Dead Sea Resort.
We’ll also be introducing the InterContinental brand to Kuwait, the Staybridge Suites brand to Lebanon and the Holiday Inn Express brand to Bahrain and India. Overall we have nearly 100 hotels in our development pipeline across India, Middle East and Africa due to open in the next three to five years.
What challenges facing the industry in 2011 do you think will continue into 2012?
The impact of the Arab Spring will certainly remain a challenge for the industry in 2012, but the challenges and opportunities it presents depend on how events continue to develop. And while some countries have seen a decline in tourism, there has also been an increase in demand across many other parts, including Saudi Arabia and the UAE.
There is no doubt that there will be great prospects for further development in the long term, particularly in countries such as Libya where there is so much scope for the growth of tourism. But the industry ultimately needs ongoing economic and political stability to reach its full potential. Yes, there have been ups and downs for the tourism industry but overall the longer term prospects haven’t changed. Hotels are a long term investment - you don’t open a hotel with only the next year or two in mind. The UNWTO (United Nations World Tourism Organisation) predicts that visitors to the Middle East and Africa (MEA) region will reach 195 million by 2030. Airlines are key to this and there is no doubt that the Middle Eastern carriers are making their mark on the aviation industry and growing at an exponential rate. This increasing number of travellers will need somewhere to stay, so growth is high on our agenda and will remain so, as we aim to make the most of the opportunity that is out there.
What three top trends do you think will dominate the Middle East hotel industry in 2012?
Firstly I believe we will see the introduction and growth of brands that are new to the region, brands such as Hotel Indigo. We are yet to bring Hotel Indigo to this part of the world, but following the success of the brand elsewhere we expect to announce our first property early next year. The growth of our Staybridge Suites brand will also continue and this helps us cater for the needs of the long stay guest.
Secondly, loyalty programmes, and the benefits that guests receive by remaining loyal to a brand, will continue to be important. The growth of loyalty programmes has been on the rise in the Middle East. And we’ve seen countries such as Saudi Arabia, which traditionally has not engaged as much with these sorts of programmes, start to embrace Priority Club Rewards (PCR). The recognition element of this is key in this part of the world and we expect to see more members joining and taking advantage of the benefits a programme like PCR can bring.
Finally, the use of technology and the online world will continue to be a hot topic. The industry is heavily focused on how we all represent our brands and hotels through the web and increasingly mobile channels, how guests research and book a room, how we engage them and use their feedback constructively and how we make their stay easier and more pleasant using technology.
Some argue that too much emphasis is being placed on social media as a marketing tool whereas for others it should be at the forefront of hotel/tourism marketing activity. What are your feelings on this?
As with every element of marketing we need to implement a good mix of all the channels, which includes social media. The interactions and conversations being held on social media sites are going to continue whether companies engage or not. So our approach is that we should certainly engage, giving us the chance to have direct contact with our guests outside of when they are actually staying with us. This direct contact is invaluable — in some cases it allows us to listen and learn and in others it allows us to engage.
This year we’ve continued to embed our use of sites such as Facebook and we’ve tried a number of new things, including a Twitter Treasure Hunt and adding QR codes onto advertising. Social media is a moving feast and it’s moving fast, so what’s critical to using these channels successfully is educating our hotels on how to engage effectively.
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