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InterContinental Hotels Battles Amenity Creep

CMO Eric Pearson Says Defining, Differentiating Brands Is Crucial, but Then You Must Make Sure They Live up to the Hype

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Business travelers, well-heeled tourists, dignitaries, celebrities and the cast of "Glee" have all called the InterContinental in New York's Times Square their home away from home.

It's been a busy year for the 607-room hotel, which opened last summer, marking the largest hotel to open in New York City in nearly a decade. It is the company's high-end offering, with standard rooms costing from $350 to upward of $700, depending on the time of year. On a Tuesday morning this summer, employees were nattily dressed and impeccably coiffed, as they greeted guests and gawkers that wandered into the modern marble and stone lobby that was the setting for a scene from the "Glee" Season 2 finale.

Eric Pearson
Eric Pearson

Eric Pearson, chief marketing officer for the Americas division of InterContinental Hotels Group, was on hand during a guided tour to point out the amenities that set InterContinental apart from other brands in the company's portfolio. IHG, which works with Ogilvy & Mather, Mindshare and Weber Shandwick, as well as a host of other agencies globally, also operates Crowne Plaza, Holiday Inn, Hotel Indigo, Candlewood Suites and Staybridge Suites.

In the lobby, oversized touchscreens help guests browse restaurant options or look up theater locations. The hotel's concierge team speaks half a dozen languages and offers recommendations via an app before guests even arrive. And each room boasts luxurious Gilchrist & Soames bath products and Keurig coffee machines, along with walk-in rain showers, computers and 42" flat-panel TVs.

"The hotel industry historically has been very poor at truly defining each brand," Mr. Pearson said. "Usually it's a price-point play, not a true differentiation of what it stands for to the consumers. So it's been a huge focus of our company over the past couple years to really try to define and differentiate the brand."

Over breakfast at Ca Va, Todd English's French brasserie connected to the hotel, Mr. Pearson talked about IHG's brand-building journey, the benefits of traveling incognito and the "war on talent" in China.

Ad Age : How do you differentiate your brands?

Mr. Pearson: What we try to do is make sure we define clearly what the brand is , and what it's not. And what it's not is going to challenge us. What happens in our industry is people start just bolting off. So, now I'm going to give you a free breakfast. Now I'm going to give you a free hot breakfast. Now I'm going to give you free WiFi. It's amenity creep.

Ad Age : Once you decide what the brand is and isn't, how do you enforce that , especially with a franchise operation?

Mr. Pearson: Talk about a challenge. At a high level, as a company, we have heads of brands. Then, at the regional level, we get into the execution. We have a whole program; we call it the Hotel Ready Program. As new designs, new brand hallmarks, new initiatives come along, it goes through the program, and then it gets communicated properly. We have field-based resources that make sure the hotel is delivering. And we do hotel visits. We do formal quality assessments, and we do real-time surveys. We have a system that we call Guest HeartBeat, which basically measures your love of the stay. We measure hotels, and we rank them. We go in the ones that need to be pushed up, and we spend more time there.

Ad Age : Do you ever do secret shopping?

Mr. Pearson: Yes. Any time I travel, I do a normal reservation through the normal consumer channels, so I'm not treated like royalty. I can usually go incognito. Every now and then I'll stay in a hotel that has an owner I know, and it doesn't work that well.

Ad Age : What do you gain from staying in your hotels incognito?

Mr. Pearson: We care passionately about delivering the brand product. And we're not there yet. But we continue to up our game and our branding. We did that in the past five years with the Holiday Inn brand. We've relaunched that brand aggressively around the world, with 3,300 hotels. And we removed 1,200 hotels in five years that didn't make the turn. The reason they didn't make the turn is they were either unwilling to make the investment necessary, or we didn't think the brand exactly represented the product that we feel going forward is what Holiday Inn is about. It's a hard decision to make, but if you're in for the long term, you've got to make those decisions.

To be honest, we kind of let some of the brand issues get away from us. After some extensive research four or five years ago, we put our money where our mouth was. In the most difficult economic environment, we went through a billion-dollar renovation of our hotels around the world. We literally transformed every single hotel, from the overall arrival experience, to sign in, to the room, the showering, the amenities. Everything was completely redone, down to the music, and even the scent. When you walk into the new Holiday Inn or Holiday Inn Express, it's a noticeable difference.

Ad Age : How important is it to be experimental?

Mr. Pearson: Everything we do is rooted in fundamental consumer insights. We were aggressive in mobile years ago. We saw it coming. We made some investments that didn't pan out in the early days, but now we book [reservations worth] over $100 million via mobile devices in a year. Right now we're testing mobile check-in. Some people don't want to go to a front desk and talk to a person. They want to go right to their room. Imagine checking in before you even get to the hotel and walking straight to your room, and the door unlocks.

Ad Age : What are some of the challenges or opportunities that you see in markets outside the U.S.?

Mr. Pearson: China is just a growth engine, with double-digit growth year on year. We literally need to hire 70,000 employees in the next couple years. And the talent, the war on talent, in these emerging markets, is incredibly hard for us. In the United States, roughly 80% of hotels are branded. But in emerging markets, it would be 10%. So you don't have that same branded infrastructure, and you also don't have that same base of qualified, highly skilled hoteliers. So in China, the big challenge right now is the war on talent. We actually built out an entire training academy. We had to, because the field, the programs weren't producing enough qualified hotel students.

Ad Age : With any given hotel, there are a number of different consumer targets. How do you make sure you're reaching the budget-conscious family taking a vacation but also the business traveler with an expense account?

Mr. Pearson: We've got a database of 58 million registered members in our loyalty program. With that database, we know your travel behavior. We know the cities you frequent most often. So, if you stayed three nights, and you normally stay six nights in the northeast, we can send you a customized email saying book your next reservation in New York, and we'll give you an extra 5,000 points.

We can very specifically target groups of customers and try to drive more of their business, more share of their wallet.

Top Places

Eric Pearson's favorite destinations, culled from 20 years of travel:

SYDNEY, AUSTRALIA
Walking across Sydney Harbour Bridge

BEIJING
Hiking the Great Wall of China

ROME
Riding Vespas at night

KAUAI, HAWAII
Horseback riding along the coast

CARTAGENA, COLOMBIA
Visiting the city where my mother was born

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