Barr: IHG’s technological direction changes company
 
Barr: IHG’s technological direction changes company
29 NOVEMBER 2017 9:43 AM

Keith Barr, InterContinental Hotels Group’s new CEO, discussed the impact the company’s new guest reservation system will have when it fully replaces its legacy Holidex system by 2019.

LONDON—Timing is everything when it comes to technology, and in the case of InterContinental Hotels Group, the waiting has been the hardest part for its much-anticipated guest reservation system.

The schedule for installing the GRS actually delayed the integration of Kimpton’s loyalty program into the IHG Rewards Club loyalty program—a decision made necessary by the desire to be efficient, said Keith Barr, IHG’s CEO, during an interview from the company’s central London office in Denham, England.

“(Kimpton’s integration has) been slower than we wanted, and it’s actually kind of tied to GRS,” he said. “We recognized we had to migrate the Kimpton hotels over to (the) central reservation platform, and we made the decision last year, saying, ‘Let’s wait for (the new GRS), because we don’t want to have to move them twice.’”

IHG could have put Kimpton into its Holidex, a legacy central reservation system IHG is in the process of retiring, and then put them into the new GRS, but the company decided not to, Barr said.

“It’s a lot of work, a lot of transitioning, and a lot of training, so they’re moving right into GRS next year,” he said. “They’ll be fully integrated from a channel perspective and loyalty perspective in 2018.”

The new cloud-based guest reservation system has been delivered to 100 properties thus far. A full rollout will commence in 2018, and the installation will finish in early 2019, according to Barr.

“GRS is going to be transformational,” Barr said.

The company changed and upgraded its middleware during the past three years to prepare for the switch, he said.

“We’re going to have the ability to do things going forward that we just couldn’t dream of two or three years ago,” Barr said. “It’ll let us work in a service-based architecture working with different companies around the world that deliver different benefits.”

The functional, agile technology will enhance revenue delivery via a more intuitive, easier to use interface, Barr said. Owners shouldn’t expect a huge drop in technology expenses once GRS is fully integrated—the move should be cost-neutral.

“Effectively what we’re doing is keeping our costs the same for the owners, but adding much more functionality,” he said. “We’ll be doing quarterly or semiannually releases of new functionality made to maintain the costs as they are today. Our cost to maintain is going to go down, but they will continue to be able to develop feature functionality, which is nice to see because you’re not locked into having to do this massive development project centrally and then launch it every two years, we can be much more agile and nimble with it. “

The other big tech-oriented transition for IHG is the industrywide adjustment to advanced data crunching—specifically in marketing and revenue management, Barr said.

“The utilizations of (data-management platforms), (demand-side platforms), first-party, third-party data, to market in a more one-to-one basis to customers is where the industry is either headed or there today,” he said. “We’re spending more in that space than ever before and in upgrading our investment in technology and that drives high (return on investment) for our owners, to make sure we spend our marketing dollar more intelligently, and there’s innovation happening all the time. Then it links over to revenue management.”

More hotels are opting for the centralized revenue management because they recognize the complexities of the concept, he said.

“The next big thing is machine learning and AI; it’s going to be layered on top of it,” Barr said. “We’re already using a bit of it in our business today, but it’s going to become the prevalent thing that will drive revenue management transformations going forward for the next three to five years in the industry.”

A changing focus in the hotel industry
The emphasis on technology couldn’t come at a better time, Barr said. The race for bigger portfolios among the world’s hotel companies must be accompanied by a focus on technology.

“You have to leverage your scale to get great distribution agreements … so you have to kind of look at in totality how do you have a highly profitable and successful revenue delivery enterprise to pair up with great brands,” Barr said. “We invest significantly every single year in that enterprise saying, ‘What (are) the technology advancements we want to make,’ and it can either be about taking costs out of the business or how we drive a greater share of wallet from customers.”

With all of its promise, technology remains the biggest challenge for the hotel industry, Barr said.

“We really understand customer needs, we understand the customer journey (and) can build great brands,” he said. “It’s really understanding the technology trends and how you’re going to invest intelligently around the things that matter most to customers and owners. You can chase lots of shiny objects.

“It’s really understanding which ones are going to matter most to owners and customers going forward and being able to filter out the noise and make really smart long-term and strategic decisions around technology,” he added.

Barr said the most important amenity in a guestroom room beyond the bed and bathroom is Wi-Fi.

“If you have to take three hours to download something or you can’t easily connect, it’s frustrating, particularly if I don’t have a lot of time—so you’ve got to get it right,” he said, adding that he travels with four devices that need Wi-Fi connectivity in a hotel room.

Barr said the company’s two-year-old IHG Connect Wi-Fi program addresses connectivity—including the amount of bandwidth being piped into a hotel. It’s includes a quality sign-on experience and total coverage within the hotels—and can be centrally managed to control costs.

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