CEO Elie Maalouf said that alongside the investment in its guest reservation system (GRS), an initiative developed with Amadeus first announced in 2015, IHG has developed a revenue management system (RMS) and started work on a new property management system (PMS).
The GRS is enabling the upselling of room attributes in more than 6,000 hotels with the average value per upsell at $40 across its Luxury and Lifestyle portfolio and $20 for its Essentials and Suites properties.
"We continue to build on the success of room attribute upsell, as well as stay enhancements, to increase direct channel contribution, generate more revenue for our hotel owners and increase fee income for IHG," Maalouf said.
The cloud-based revenue management system, which has been implemented in approximately 1,700 hotels, will change how hotels "manage booking channel and pricing decisions," according to Maalouf.
"We are targeting to have the new system in 4,000 hotels in 2024.This highly sophisticated platform uses best-in-class data science, forecasting tools and artificial intelligence to deliver advanced insights and recommendations to hotels. Initial results from pilots indicate encouraging uplifts in revenue performance."
He didn't name technology partners that IHG is working with for the RMS, and on the development of the PMS he only added that the approach is for cloud-based platforms with one already in place at some properties in China and pilots ongoing in the United States and Europe.
Maalouf also shared some details on the relaunched IHG One Rewards loyalty program that was unveiled in 2022. He said a One Rewards member, compared with a typical online travel agency guest at an IHG hotel, spends 10% more on average, and the cost of the loyalty member's booking to the hotel "including loyalty assessments and marketing program fees" is about 50% lower than an OTA guest.
He added loyalty members are "roughly 20% more profitable to a hotel owner" as a result and that knowing loyalty members and their behaviour also means it costs less to market to them.
IHG One Rewards, which has more than 130 million members, was relaunched alongside a mobile application, which is the group's fasting growing distribution channel and has helped increase membership of the program, according to Maalouf.
"Member penetration, the number of room nights booked by members, continues to grow, and now exceeds 60% of room nights globally. This is roughly 10 points higher than prior to the IHG One Rewards launch two years ago. The Americas region continues to lead member penetration, approaching 70%, and we are seeing strong improvements across all three of our regions."
He also said that U.S. cardholders stay 85% more than non-cardholding loyalty members and spend 35% more. Summing up, Maalouf said all these factors mean that the percentage of room revenue coming from IHG-managed channels has hit 80% for the first time, up three points on the past two years.
"Digital channel contribution continues to lead this growth, while OTA contribution has remained flat in recent years. Digital contribution includes our IHG mobile app and web channels, which have benefited from the investments we have made in recent years."
Meanwhile, Marriott International shared in its Q2 2024 report that its Bonvoy loyalty program has more than 210 million members. It attributed enrollment increases to recent partnerships with Rappi in Latin America, Rakuten in Japan and Alibaba in China.
The company also shared that member penetration of global room nights had also increased to a new high in Q2 of 71% in the U.S. and 65% globally.
The company has made a number of recent moves signaling its ambitions around driving loyalty and new revenue streams, not least bringing together its commercial and technology functions.
In a recent interview with PhocusWire, Drew Pinto, who has led the new structure as executive vice president and chief revenue and technology officer for almost 18 months, shared that the company is replacing its CRS, PMS and loyalty platform as part of its own ambitions to offer guests much more than a room.
Tags: Elie Maalouf, IHG, Hotel, PhocusWire, AMADEUS
