Maintaining Brand Consistency Generates Client LoyaltyWed, 05/08/2019 - 14:08
Q: IHG has been in Mexico for 48 years. How has IHG’s business evolved over the years?
A: The company started with a Holiday Inn in the city of Tampico. Our development is based on the needs of our clients, as illustrated by the expansion of our catalogue, which now encompasses 15 brands. Each brand is directed toward a very specific market segment. For instance, our prime brands, such as Kimpton® Hotels & Restaurants, InterContinental® Hotels & Resorts or HUALUXE® Hotels and Resorts, cater to the needs of travelers who want extraordinary service and sophistication, while those looking for value for price can choose our Holiday Inn and Holiday Inn Express brands. We also offer brands that cater to specific travel requirements, such as extended stays at our Staybridge Suites® or Candlewood Suites®.
As the company evolved, we started targeting younger travelers who want basic services at a good price with exceptional delivery. We now cater to this segment through our avid® hotels brand, which was created in 2017 and now has 150 signed franchises slated for the US, Canada and Mexico. Four of these will be in Mexico and are expected to start operating in 2023.
Q: Considering IHG’s vast portfolio, which brand best accommodates the needs of Mexican travelers?
A: A key example of the levels of acceptance and affinity between our brands and travelers is Holiday Inn and Holiday Inn Express, which comprises most of our portfolio. Out of the 141 hotels we have in the country, 112 belong to the Holiday Inn portfolio. Part of our success and acceptance is based on consistency and service. When our clients see our brands, they know what they will receive. Another brand that has been very well-received is InterContinental Hotels and Resorts. The Presidente InterContinental® hotels in Polanco, Cancun and Cozumel are among the best in the world.
Q: What impact do partnerships have on IHG’s growth in Mexico?
A: In Mexico, we employ the franchising model to ensure growth. Our franchisees believe in our brands and are key components of our success story by growing together with us. Some of our franchisees include Grupo Fibra Inn, Grupo MileniuM and Grupo Presidente just to mention a few. Our relationship with these groups spans several years and has been built on a foundation of trust, which is bolstered by the fact that IHG’s brands are economically sound, well-positioned on a global level and have an important loyal client base.
Q: Given your international experience and your expertise in the Mexican market, how would you assess the evolution of Mexico’s tourism sector?
A: The past two presidential administrations made direct efforts to boost the sector, particularly the administration of President Peña Nieto, which was strategic and focused on positioning Mexico not only as a sun and beach destination but as a multifunctional destination, including cultural, medical and religious offerings. This strategic diversification, with each pillar having its own specific agenda for promotion, generated a significant impact helping Mexico rise to sixth from 12th in the rankings of most-visited countries in the world.
Q: Which pillars should the public and private sectors work on to maintain Mexico’s momentum in the tourism sector?
A: The tourism industry is a service industry, which means that we need to ensure collaborators are highly qualified to deliver the best service that as a country we want to be remembered by. The second point is related to infrastructure. To continue growing the way we have been growing, we need to have really good infrastructure, such as roads and airports, in addition to good hotels. Another point is security. To ensure growth we need to ensure security. Despite the many differences that might exist between the public and private sectors, the strategic vision is set. We know what we need to do; it is up to us to decide whether we want to do it or not.
Q: Palladium Group told us that one of the biggest challenges the tourism sector faces is attracting quality tourism. How can the private sector contribute to this end?
A: It has to do with diversification, to stop focusing all our efforts on a single tourism product. For instance, Mexico is very good at offering its beach and sun destinations, which tend to attract several nationalities of travelers such as US and Canadian visitors. However, diversifying the tourism offering to include cultural options allows Mexico to promote itself in markets that might have higher purchasing power, such as Japan or certain Asian countries.
That said, we cannot deny that one of the country’s main attractions is the sun and our beaches. There is a market segment, such as the European or the Russian segment, that is willing to pay for a more sophisticated service scheme related to this option. Many hotel groups, including IHG, have diversified their brands after understanding that there is room on this field. Today, around 50 percent of travel purchases are by people over 50 years of age who have a higher purchasing power and are focused on having a more complete experience.
The tourism industry holds significant weight in the country’s GDP. We are a country perceived as one of the top travel destinations worldwide and we need to continue boosting it and taking advantage of it. I am certain this will be top of mind for our new Minister of Tourism, who is a highly recognized individual within the country’s tourism community.
Q: Last year you talked about the company’s digitalization efforts. How can the traditional hotel offering compete with the likes of Airbnb?
A: You cannot stop competition nor digitalization. I think that we need to analyze the ways in which we can compete and provide guests what they need. We sell a hotel offering that provides defined services, strong brands, a great loyalty program and focus on delivering our service the best way possible through a great sleep experience and a memorable dining experience, just to mention a few. Digitalization allows us to showcase these services.
Almost 95 percent of our hotels now have a new reservations system that provides more functionality. When clients access the platform, they have more options to choose from for their stay, including the type of room, the view from the room, whether it is the more economical option or the most expensive and all the additional services we offer. We also ensure that our hotels offer up-to-date content, which gives us a strong presence on digital platforms. When you combine this with strategies that optimize organic or paid search optimization, then you can position yourself among the top results.
Q: What are IHG’s growth expectations for the short term?
A: Over the next three years, we plan to open 37 new hotels in Mexico. More importantly, we will continue diversifying our presence. We are focusing on strengthening our wellknown brands, such as Holiday Inn and Holiday Inn Express. Our new avid brand and the growth of our extended stay catalogue are another source of diversification in the country.