A lesson in operational agility: featuring Paul Watson of IHG Hotels & Resorts

A year has now passed since hotels have been in hibernation. But spring has arrived, and once they awake, they have the opportunity to rethink, to reset, and to be stronger than ever.

Paul Watson, Director of Operations at IHG Hotels & Resorts (IHG), remains pragmatic and positive during the pandemic. While he is in no doubt that the last year has been painful for the industry and its people, he emphasises that “in terms of operations, never before have we had the opportunity to reset our business and focus on what really matters: our guests.” Many hotels could have fallen into a permanent slumber this year, and sadly some have. However, there are more survivors. Thanks to sustaining Government support, businesses have used this period to adapt to the ‘new normal’, but also to restructure and refine their business models. Paul generously shares what this means in practice for IHG: the practicalities behind a client-focused recovery, and their operational priorities as they prepare to reopen.

Most obviously in a pandemic, implementing and maintaining effective hygiene regulations will be a linchpin for many hotels. Yet this alone is not enough; to succeed, hotels must make these sanitisation protocols visible to guests if they wish to reassure them. What is more, it is the most conspicuous of protocols which will be the most comforting. IHG have evidence of increased consumer satisfaction after heightening their cleaning programmes: “The safety and wellbeing of our guests has always been at the core of our business, but we’ve enhanced the customer experience further to ensure that colleagues and guests feel safe and comfortable through ‘IHG Way of Clean’ and ‘IHG Clean Promise’. We’ve seen a 30% uplift in positive reviews on social media around cleaning, as well as improvements in guest satisfaction. This shows the effectiveness of what we’re doing, and that safe, clean hotels are a top priority for consumers.”

Hygiene is not the only operational priority that has been bolstered by the pandemic. Ever-changing levels of Government restrictions have made consumers tentative to plan ahead, let alone book a non-refundable holiday. As a result, IHG, for example, are offering extra support for guests who book directly rather than through online travel agents: “We introduced our ‘Book Now, Pay Later’ scheme last year: customers can reserve without a deposit and are entitled to full cancellation up to three days before their stay, meaning travel planning is commitment-free. We always advise guests to book directly for the most competitive deals and value-added options available, and to make the most of loyalty programmes such as IHG Rewards.” Hotels who adapt to create generous, flexible booking policies during this time will not only assuage guests’ concerns, but will capture vital pent-up demand in time for summer. Moreover, such offers may fuel more direct bookings, strengthening customer relations and spelling better margins.

Some hotels are going further than adjusting operational policies, and are either repurposing space, or developing new products to suit changing market requirements. Running virtual classes or concerts has allowed hotels to stay connected with their client base and been an alternative source of income while closed. Promoting the private hire of spa areas, for example, taps into the increased awareness of self-care as a result of COVID-19, and turns the hurdle of social distancing into a trendy and exclusive offer. Other hotels have used the lockdowns to adapt or build facilities which allow for social distancing whilst capitalising on the pandemic-boosted trends of outdoor and experiential tourism: “We believe that guests are looking to escape their connected and potentially stressful environments in favour of meaningful, out-of-the-ordinary experiences, whether that means fresh air, waking up to birdsong, pioneering wellness, home-grown food or immersing in the local culture and community.”

In particular, repurposing or rethinking corporate travel and events will be key in adapting to the ‘new normal’. Paul explains that “planners are considering all options when it comes to bringing teams back together. In 2020, we introduced our Meet with Confidence programme at IHG to support changing needs. Now the programme includes hybrid capabilities which connect multiple hotel locations to regional and global business and leisure events through live streaming, creating more shared experiences for virtual and in-person attendees.” Initiatives such as these have revealed the sector’s creativity and agility in the face of adversity, and demonstrated a tenacity to invest during what is an austere time.

As seen with IHG, many of these creative adaptations require technological solutions, which Paul believes “will be one of the legacies of the pandemic”. Technology’s inimitable capability is reducing human interaction – for example, with QR codes, digitalised check-in, or robots. If these tech solutions can also improve guest convenience and service, they will prove invaluable for hotel recovery and beyond: “Customers are more digitally savvy than ever before, and experiences must match this, focusing on ensuring safety whilst also removing friction to provide seamless luxury service.” As far as operational technology is concerned, the emphasis is slightly different; instead of fresh software built for the ‘new normal’, hotels are now fully leveraging current platforms to fulfil their potential: “Operationally, our main goal with technology-development has been to obtain and use data that enables our General Managers to make better decisions. In most of our hotels, we have many systems that promote good decision-making in rooms operations; we are now concentrating on enhancing the use of existing technology to develop customer experience, financial performance and holistic managed value proposition.”

To conclude this lesson in operational agility, Paul shares his top priorities for flexible recovery during a turbulent period: “Ensuring we have flexibility and scalability built into our model to re-open viable and sustainable operations is of the utmost importance. Getting profit for our owners and for reinvestment back into the business, and especially into our people, is fundamental. Secondly, do the basics brilliantly; I don’t think we’ve ever had so much clarity about what our guests really want, nor have we had the opportunity to rebuild our operations to reflect this.”

What is more, further to the refinement of hospitality business models, there is hope that the silver lining of this past year will be expediting the creation of a more sensitive and ethical sector. We have already observed this from hotels striving to make a social difference - sheltering victims of domestic violence, those without housing, or accommodating key workers at reduced rates. The recovery should rebuild an industry with a reduced carbon footprint, with uncompromising hygiene standards, with stronger links to local communities, and with more compassion for employees and guests. “At IHG, we call this our ‘Journey to Tomorrow’ programme. It means operating safe, clean hotels in a way that promotes diversity, equality and inclusion, human rights and responsible business decisions. Our ten-year programme reflects the passion we have for making a real difference to the world around us. We’re looking forward to the next chapter at IHG, which is focused on building our brands, putting guests and owners at the heart of everything we do, creating a digital advantage, and ensuring that we have a positive impact on our people, planet and the communities around us.”

Contacts

Lucy Cole
BDO Research Analyst
+44(0)7890 554 917
lucy.cole@bdo.co.uk

Paul Watson
Director of UK&I Operations at IHG Hotels & Resorts