Intercontinental Hotel Group Case Study

Back in 1978, China had only 137 tourist hotels. With the introduction of economic reform and the open door policy, this led to a rapid growth in the hotel industry for China. The InterContinental Hotel Group (IHG) was among the earliest international hotel chains to enter the China Market. The first hotel they introduced to China was the Lido Holiday Inn that was opened in Beijing. After the first year of the Holiday Inn in China, there was an outstanding performance by earning a big profit. This proved that the market for international owned hotels was good and with tourism and the economy growing every year, why wouldn’t you place a hotel in Chinas growing market. Just ten years later, there were ten more hotels managed by the IHG in major cities in China. The InterContinental brand innovated to the China market to set them apart from the competition. They were the first international hotel chain to launch a Chinese language website and the first to offer online reservations to guests who did not use credit cards. The premise of this paper is to provide the reader with insight on how the InterContinental Hotel Group implemented strategies in China to gain a competitive advantage. I will go further to discuss how it can maintain its advantage in the future. The IHG Company has

More than 3,300 hotels operating under IHG are franchised. When it comes to the Asia- Pacific region, franchising is not used. IHG implemented a management contract, which allows owners and management companies to deal with more complex issues in developing countries. This is an advantage for IHG because when they first came to China, the country itself was in desperate need of expertise in hotel management. These new management companies can now help out these hotels with the provided level of service needed. Most of the IHG hotels are under a management contract in the Asia- Pacific region and this has seemed to work for