The presentation covers the digital disruption of airbnb in the hospitality indutry and the best ways for the other players to react (focused on IHG - InterContinental Hotels Group) - Yannick Pinkinelli

1. DIGITAL DISRUPTION InterContinental Hotels Group

2. Introduction
“ ‘First they ignore you, then they ridicule you,
then they fight you, and then you win.’
Airbnb is the new disrupter.”
- Chip Conley (2014), Head of Global
Hospitality at Airbnb, quoting Ghandi

3. CONTENTS:
Background Analysis Strategy
• Company
Background
• Disruption
• Disruptor
• Industry Comparison
• Company
Comparison
• IHG Digital
• SCQ
• Strategy & Tactics
• Actions
• Control
• Risk Management
Team 4 - Digital Marketing and Social Media

4. Background Analysis Strategy
COMPANY BACKGROUND:
» Formally founded in 2003
» Headquarter in Denham, UK
» World’s largest hotel company [by rooms]
» Nine brands in over 100 countries with over
4,700 hotels and more than 688,000 rooms
» $1,903m total revenue [2013]
» Main target groups: Families and professionals
Team 4 - Digital Marketing and Social Media

5. Background Analysis Strategy
DISRUPTION:
Sharing economy:
» It is revolutionizing the way we consume goods
and services, changing our perspectives and
options.
» Examples: Car sharing, house exchanges, rentals
between private parties and co-working.
» Internet is used to bring together people with
underused assets.
» Transportation and accommodation has been
most affected by this new economy with Lyft,
Uber and Airbnb being main players.
Team 4 - Digital Marketing and Social Media

6. Background Analysis Strategy
DISRUPTOR:
Airbnb:
» Founded in 2007 – Airbnb means Air Bed and Breakfast
» An online platform through which ordinary people rent out their
spaces as accommodation for tourists.
» Over 190 countries with more than 600,000 listings
Disruption:
» Cheaper price, than regular hotels
» Different views and locations and more variety
» It is C2C not B2C so more personal attention is required
Team 4 - Digital Marketing and Social Media

7. Background Analysis Strategy
INDUSTRY COMPARISON:
» Number of rooms [in thousands]
700
680
660
640
620
600
IHG Mariott Hilton
Wyndham Airbnb
Team 4 - Digital Marketing and Social Media
300
200
100
0
NY CHI BOS SF
Hotel
Airbnb
» Avg. room price [in $]
» World coverage [in %]
IHG
52
Airbnb
99

8. Background Analysis Strategy
COMPANY COMPARISON:
» PUV Chart
Team 4 - Digital Marketing and Social Media
3
2
1
0
-1
-2
-3
IHG Airbnb
» Price Chart
20
10
0
-10
-20
IHG Airbnb
Low Medium High
PUV
Price

9. Background Analysis Strategy
IHG DIGITAL:
Website:
» Privileged partner of Room Key
» Links to Twitter and Facebook on the website
» Already existing App with limited services
Social media:
» Facebook provides information about the loyalty
programme but generally lack of engagement
» Twitter used frequently to interact with customers.
#IHG is used successfully for customer service
» YouTube has few subscribers but partly more than
200k views
Team 4 - Digital Marketing and Social Media
> 65k likes
> 31k likes
> 3k likes
» Overall good use of digital marketing considering the target group

10. Background Analysis Strategy
SCQ:
» Situation – Complication – Question
The largest global hotel company with stable growth since years
Airbnb is disrupting the industry and threatening our business
How do we keep our leading position in the market by leveraging
and improving our core competencies and creating trust?
Team 4 - Digital Marketing and Social Media
S
C
Q

11. Background Analysis Strategy
STRATEGY & TACTICS:
Services Trust Strategy
Security
&
Privacy
Certainty
Team 4 - Digital Marketing and Social Media
Diversification:
New product
development
Online strategy:
Community
building
Offline strategy:
Image creation

12. Background Analysis Strategy
ACTIONS:
» Create an App
» Digital room key
» Booking management
» Insider tips with deals and
Team 4 - Digital Marketing and Social Media
promotions
» Interactive screens in the
rooms
» Personalized welcome
message and
recommendations
» Create a competition to
share experiences which is
played on all channels
» Promote the image of trust
offline on TV, in Airport
lounges and in Travel
Magazines
My booking
My keys
Around me
Rewards Club
Diversification:
New product
development
Online strategy:
Community
building
Offline strategy:
Image creation

13. Background Analysis Strategy
Team 4 - Digital Marketing and Social Media

14. Background Analysis Strategy
CONTROL:
» Measure reach using the likes and views of
advert posted on YouTube and also the likes/
comments on Facebook.
» Use of social media to measure the level of
interest and engagement for the photo contest
which will indicate success
» Create short survey instruments to measure level
of engagement and expectation level of
customers
» App should be designed to alert (customer
service) in case of deletion, so subsequent
action can be taken to deal with situation
Team 4 - Digital Marketing and Social Media

15. Background Analysis Strategy
RISK MANAGEMENT:
» We mitigate risk of loosing customers by providing
customers with creative, relevant and personalized
information.
» For example providing tour guides and events at
travel destination, introducing features that require
customers to use the app.
» Providing an opportunity to customize a room as
preferred with cushions and curtains to make it more
personal.
» In case of technology failure (flat battery), there is
always the option of the reception desk helping out
with a regular key
Team 4 - Digital Marketing and Social Media

16. THANK YOU FOR YOUR ATTENTION!