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Inter Continental Hotels Group (IHG) SWOT & PESTLE Analysis

ID : 52227053| Mar 2019| 15 pages

COMPANY PROFILE -Inter Continental Hotels Group (IHG)

Business Sector :Hotels & Hospitality

Operating Geography :United Kingdom, Global

About Inter Continental Hotels Group (IHG) :

Intercontinental brand was established in 1946 by JuanTrippe. The group is one of the leading hotel companies with 12 different brands, presence in 100 countries and 766,837 available rooms worldwide. The company has its headquarters in Denham in U.K.

Inter Continental Hotels Group (IHG) Revenue :


$4,337m - FY ending 31st Dec 2018 (y-o-y growth 6.4%)
$4,075m - FY ending 31st Dec 2017

Ownership / Major shareholders :


As of august 2018, the ownership distribution for the top 5 shareholders of IHG are as follows:
1) Capital International Investors (39.16%)
2) FMR LLC (36.12%)
3) Renaissance Technologies LLC (2.76%)
4) Parametric Portfolio Associates LLC (2.21%)
5) Arrowstreet Capital, Limited Partnership (1.58%)

Competitive Analysis of Inter Continental Hotels Group (IHG)

SWOT
PESTLE
The SWOT/ TOWS analysis for Inter Continental Hotels Group (IHG) is presented below:
Strengths
Weaknesses
1. Asset light business model
2. Wide geographical presence with focus on priority markets
3. Customer experience & relationship focus
4. Occasion wise brand portfolio
5. Strong digital outlook & implementation
6. Successful employee engagement
7. Strong financials and high RevPAR
1. No economic hotel brand
2. Poor information security systems
3. Slipped to 3rd position worldwide
Opportunities
Threats
1. Fragmented branded hotel market
2. Increased international tourist travel
3. Technology facilitated bookings
1. Sharing Economy in Hotel Industry
2. Unprecedented Events
3. Increased dependencies on Intermediaries
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Detailed SWOT Analysis of Inter Continental Hotels Group (IHG)

 

Strength

1. Asset Light Business Model: The Company is implementing this by adopting predominantly franchise model in US, managed model in AMEA and reducing owned hotels to 8 globally. In this way it is becoming asset free, cash generative and is returning the surplus cash to shareholders post strategic investments. It has returned £5.9 billion of funds to shareholders since 2004 till date.

2. Wide Geographical Presence with Focus on Priority Markets: The group has presence in 100 countries with 766,837 rooms. It has 87% of total open rooms and 89% of pipeline rooms in priority markets of US, Middle East, Germany, UK, Canada, Greater China, India, Russia and CIS, Mexico and Indonesia. It has an established and strong presence in the emerging economies where spend on travel and hotel is increasing. The lifestyle brand Kimpton Hotels & Restaurants has been made global and strategically positioned as an upper middle class lifestyle brand.

3. Customer Experience & Relationship Focus: IHG trends report reveals that the consumer preferences are shifting towards personalisation and uniqueness of services unlike traditional preference on availability and cost. IHG is equipped to handle the change with the Guest Reservation System which provides cloud-based booking platform that offers guests a more personalised experience. “Your Rate by IHG Rewards Club” provides access to exclusive, preferential rates to loyalty members booking through direct channels & the “Guest Journey” is building loyalty relationships and strengthening their competitive advantage. IHG also supports the needs of travellers through wellwellwell.com to nurture long lasting relationships with their prospective customers.

4. Occasion wise Brand Portfolio: IHG has followed a unique approach of segmenting and popularizing different brands of hotels (12 in number) on the basis of guest occasions which helped them in a differentiated brand experience for guests that better meets their expectations. As an example The Indigo Hotel Brand which reflects the rhythm of the place it is located in & is specially catered for people inspired by newness. The Holiday Inn which is becoming popular mostly in Asia market especially in China is focused on family time & social identity. The Staybridge Suites Hotels is with differentiated focus on business productivity.

5. Strong Digital Outlook & Implementation: Crowne Plaza is a fully digital brand of the IHG focussed to be a front runner in the digital adoption race. IHG’s mobile app has driven $1.3B (0.34% of the total revenue) revenue and has helped in securing flagship locations. Data driven targeted marketing across various channels, Mobile check-out and Wi-Fi offer IHG Connect all are initiatives to satisfy the digital consumer and fast forward the adoption.

The remaining section under "Strength" is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Major Competitors :

  • Belmond Ltd.
  • Boyd Gaming Corporation
  • Caesars Entertainment Corporation
  • Century Casinos, Inc.
  • Choice Hotels International, Inc.
  • Civeo Corporation
  • Eldorado Resorts, Inc.
  • Extended Stay America, Inc.
  • Full House Resorts, Inc.
  • GreenTree Hospitality Group Ltd.
  • Hilton Grand Vacations Inc.

Major Brands :

  • Regent
  • Intercontinental hotels and Resorts
  • Kimpton
  • Hotel INDIGO
  • Even Hotels
  • Hualuxe
  • Crowne Plaza
  • Voco
  • Holiday Inn Express
  • Holiday Inn Club Vacations
  • Holiday Inn Resort
  • Holiday Inn
  • Avid
  • Staybridge Suites
  • Candlewood Suites
  • IHG Rewards Club

Key Business Segments / Diversification :

Inter Continental Hotels Group (IHG)
Hospitality – hotels Holiday packages - resorts

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview
Name
Business Segment
Year
Type
Objective/Synergy Achieved
Starwood Capital Group (under the Principal Hotels and De Vere brands.)Hospitality Group2018AcquisitionThe deal was worth US$ 1.1 billion. The hotels will convert to brands under the IHG umbrella, reportedly either its luxury InterContinental flag, its upper-upscale Kimpton Hotels or a new upscale conversion brand that is still under wraps. The deal should help spur expansion of the Kimpton brand in Europe, where currently there is only one hotel, in Amsterdam.
Regent Hotels and ResortsInternational luxury hospitality 2018AcquisitionThe deal is worth US$ 39 million wherein IHG bought 51% stake in Regent Hotels and Resorts. IHG will bring Regent within its own luxury hotel brand portfolio, with the aim of growing it from six hotels today to over 40 in key global gateway cities and resorts over the long term.
Toledo InternationalReal Estate2018AcquisitionLed to signing of a new property in Singapore: Holiday Inn Express Singapore Serangoon
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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Check Out Analysis of Other Relevant Companies

TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Inter Continental Hotels Group (IHG) Analysis Report

Annual report IHG 2016- https://www.ihgplc.com/investors/annual-report

IHG trends report- https://www.ihgplc.com/news-and-media/ihg-trends-report

IHG results and presentations- https://www.ihgplc.com/investors/results-and-presentations

Airbnb and Hotels: What to Do About the Sharing Economy?- https://www.wired.com/insights/2014/11/hotels-sharing-economy/

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SWOT & PESTLE.com (2020). Inter Continental Hotels Group (IHG) SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/inter-continental-hotels-group-ihg/ [Accessed 11 Jul, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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IHG SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.

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Inter Continental Hotels Group (IHG) SWOT & PESTLE Analysis
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