Inside knowledge

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A pair of sleek Teslas, side by side at electric charging points, catch my eye as I pull up in the car park of the Crowne Plaza Gerrards Cross. Here’s an immediate indication of the need for hotels to move with the times to keep customers happy, and I haven’t even set foot in the lobby yet.

I’m here to meet Nick Rich, vice-president, global market and consumer insights at InterContinental Hotels Group (IHG), one of the world’s leading hospitality businesses. It is present in 100-plus countries and owns more than a dozen hotel brands, including Holiday Inn, Kimpton, Hotel Indigo and, of course, Crowne Plaza and InterContinental Hotels & Resorts. 

All told, IHG has more than 5,200 open properties, which offer more than three-quarters of a million hotel rooms combined. Roughly 80% of its properties are run through franchises, but in emerging markets – such as Greater China – the business is predominantly a managed one, which means IHG takes responsibility for operating hotels on behalf of site owners.

Rich has been at IHG for 11 years – first as director, consumer insights EMEA, before taking on his current role in April 2013 – and he has been the driving force behind the evolution of its insights function. The 20-strong core global insights group is mainly focused on strategy and brand, and is split, geographically, between the hotel group’s main regions. There are another 10 or so people working on specific platforms, such as IHG’s huge global customer satisfaction programme, through Ipsos, which collects 3.5m interviews a year. 

Finally, there are analysts positioned in pockets and functions across the business, such as digital and finance. These aren’t necessarily straight-line reports into the group, but they work closely with insights as part of what Rich describes as the collaboration between data and insight. “It’s a fairly simple, straightforward structure,” says Rich. “I guess it has to be, and we are all connected. But, increasingly, there are people who have taken on more of an account role. Some people are focused on sales, some on certain brands, and some of us are focused on more global strategy for the board. So we divide and conquer. That’s the structure I built to service the business.” 

The team mantra is ‘knowledge is for everyone’. Marketing is the number one partner because it is right on the doorstep, but the aim is to focus on the whole business. Indeed, the big plan is for insights to become a horizontal function, partnering with departments such as finance, HR and operations to give corporate, business and customer knowledge, as well as more traditional marketing research. Rich is at pains to point out that everyone in IHG needs to know about the customer. 

An insight group that delivers business-critical information is vital because the company operates in a hugely competitive sector. “IHG faces all the challenges of a global brand – not least how to maintain style and standards worldwide while being sensitive to local tastes and norms,” says Steve Wills. He is founder and director of Insight Management Academy, provider of consultancy, training and bench-marking to insight teams, and organiser of Insight Forum, a quarterly best-practice event in which IHG participates.

“And it competes in an oversupplied market, where expectations are rising all the time. So, the insight team has to be very switched on to short-term requirements and performance, while trying to see where the world is going and what future needs will look like. This is all the more important because it takes time to build hotels in new places and refurbish existing ones if tastes change.” 

Identified needs 

Understandably, there is a slightly greater focus on IHG’s leading brands – such as Holiday Inn, InterContinental and Crowne Plaza – with much emphasis on keeping the product and service relevant and up to date. However, newer brands developed by the group to satisfy ‘identified needs’ are getting increasing attention.  

Hualuxe is a case in point. Originally a Chinese brand, the boom in outbound tourism from China has led IHG to explore how Hualuxe might be developed and adapted for Chinese tourists visiting top-tier city destinations, such as London, Paris and New York. 

Of course, the growing Chinese domestic market presents opportunities too. Rich, who travels quite extensively in his role, was in China recently and found himself fascinated by its rapid pace of change. “I was struck by the fact that everyone is on electric scooters, and the buses are all turning electric,” he says. “Their efforts on the environment are not just one step ahead of the rest of the world, they are head and shoulders in front with reinvention; their innovation is incredible. You have to adapt to that life in your hotel design.”

As well as exploring trends in eco-friendly initiatives, mobile booking and in-room entertainment, IHG has adapted and tested some of the compelling creative coming out of China for use in other parts of the world. Together with the US, the UK and Germany, China is very much a key market.

Opinion capture

As a sector, travel is unusual in having its own, dedicated cross-sector feedback channel in the form of TripAdvisor. IHG takes careful note of the comments left on this influential platform, but it also has its own huge opinion-capture mechanism – 3.5m customer interviews a year. The vast majority of these are from loyalty programme members – with response rates to a concise survey standing at around 20%. 

Rich confirms there is correlation between TripAdvisor reviews and what IHG receives via its own customer feedback. However, the advantage with the latter is, typically, a far greater level of detail about issues or grievances, which allows general managers and front-line staff to spring into action and fix problems fast.

The launch, this year, of a new global reservation system – developed in partnership with travel IT powerhouse Amadeus – is intended to improve the booking experience for customers. But it also represents another step forward for insight by generating “a wealth of information to understand where people are coming from, what preferences they have and what experiences they are looking for”.

IHG has also worked with market research behavioural science specialist The Irrational Agency to try to build a clearer picture of what is important to customers during their ‘guest journey’ by addressing the nuances and potential ‘pain points’. The research largely confirmed what IHG already knew. 

“But there were spikes we had not necessarily seen before,” says Rich. “For instance, about that period on arrival – the experience you have with the front desk and the journey to your room.”

This, says Rich, got the team thinking about what could be done to help ease those pain points by adding what it termed moments of truth – positive little interactions with staff that bring something different and memorable. For example, helping families on leisure breaks with “camera-worthy” moments. “We wanted to create more moments where staff could help and be with guests, and interact with them, because we know that is such a powerful experience,” says Rich.  

One of the big issues the research industry faces, Rich contends, is being heard within organisations. The move from research to insights has taken place because insights is about finding the underlying truth, the penetrative observation that leads colleagues to take action. Now, more than ever, in a world of data and knowledge, he asserts, the insights group needs to talk the language of business and avoid falling into the trap of doing research for research’s sake.

“We have made a key push and really created a strong partnership with finance,” says Rich. “There are two objectives for me. One is that we want to prove the worth of research and insight, so – if we have helped change a decision – what has the material, bottom-line impact been?” 

The second objective is helping the business to prioritise. “We have been asked to do every kind of research possible with hotels – from the quality of sausages on a breakfast bar right through to new opportunities in developing markets. When faced with an abundance of requests, and the need for support and partnership, we have to have some way of saying: X is a priority, but Y isn’t. By tracking it back to our bottom line – our sources of revenue growth – we can have those conversations, get ourselves out of tricky situations, and not have to say ‘yes’ to everybody.” 

Knowledgenet

First, there was i-site – a searchable, online research library used by a couple of hundred people within IHG. This did an adequate job, but it fell far short of connecting the huge amounts of useful data to be found across the business. So, in 2013/14, IHG brought in KnowledgeNet as the place to go for information.

“It is crazy that knowledge is kept in siloes,” says Rich, “so we broke out from that.”

KnowledgeNet is a machine-learning, knowledge-management platform developed by US experts Northern Light. It is an open-source solution used by 3,700 people across IHG and there are dashboards for everyone from the group CEO to local sales teams. “We have more information than we know what to do with,” says Rich. “The key is where you get the nuggets and insights quickly, and how you get that out to the business.” 

With KnowledgeNet, IHG has taken a massive step forward in pooling vast amounts of data and insight from across the group and making it easily accessible. It’s estimated the value of time saved by KnowledgeNet users through self-serve access has already topped £1m.

“It frees us up for other research, but also to do the most important thing – communication,” says Rich. “Because you want people to be making more informed decisions using the knowledge we have got. That involves getting out and speaking to more people, using whatever the tools are – our own Twitter feed, memos, newsletters – to get the message out.”

IHG AND VIRtual reality

IHG’s European brand team began using virtual reality (VR) technology about 18 months ago, predominantly to showcase concepts and designs to owners. Last year, the Europe and global insights teams got together to find an answer to the question: ‘Could VR be as good as a physical space for researching new designs or concepts?’

They repeated research undertaken by the Europe insights team for the next generation Holiday Inn guest room – but, instead of just using the physical prototype room, they also used VR to replicate the look and design.

Members of the public were invited in, and half were shown the physical room first, then given the VR headset; the others saw the room using VR first and then went into the physical space.

“We had a build-out of a hotel room in a portable building,” says Rich. “It looked like a box outside, but walk through the front door and it’s like any hotel room – amazing! We had another group in the office exposed to the design through VR, and then we swapped them. Really, it was research on research, to check that VR could give you a decent response, and people loved it. We think there was a bit of a high because the VR was a novelty, but when we got down to the question of ‘does it give you a feel of the room’, they said it was identical to the real room.” 

One concern ahead of the research was whether smaller details would be missed in VR, but that was not borne out – people even noticed the lighting. VR also gave a sense of space and depth: nobody walked into the physical space after seeing the VR room and said they expected it to be bigger or smaller. The main comment was ‘ah yes, I’ve been here before’.

There are numerous advantages for IHG in using VR in its research – not least, cost. Creating a space in VR is about 75% cheaper than building a physical version. There are also speed and flexibility upsides. It takes days, instead of months, to create a virtual space and, with just a few clicks on a computer, it’s easy to come up with hundreds of variations. Moreover, using portable VR headsets means designs can be taken to consumers, allowing for international testing at reduced cost.