The hotel multinational’s multicloud architecture delivers innovative digital services to thousands of franchises and their guests, with an eye toward improving both customer experience and the bottom line.
For IHG Hotels and Resorts, the cloud provides just the right accommodation for business success. “First and foremost we see our journey to the cloud as the most extremely important part of both our technology and commercial strategies,” says George Turner, chief commercial and technology officer of the British multinational, which relies heavily on its sophisticated cloud infrastructure, chatbots, and AI to drive more digital business at its 19 hotel brands — more so at the edge.
More than 70% of IHG’s hotels — a portfolio that includes InterContinental, Kimpton Hotels, and Holiday Inn — are franchises, making parent company IHG in essence a technology product development company that bolsters the occupancy rates and revenues for the 6,100 hotels owned by franchisees.
Turner helps drive that success by wearing two hats for the company: He oversees a product-driven organization that must develop and deliver innovative services out to hotel owners and guests continuously even as his teams continue to build out IHG’s internal technology stack and services.
And it is the chain’s hefty multicloud architecture, anchored by Aviatrix’s cloud networking and Equinix’s interconnection technology, that enables Turner to bring the hotel empire much closer to its key customers — business and leisure guests, as well as hotel owners.
The cloud also helps IHG “drive commercial value for our enterprise,” Turner says, noting that IT pros can innovate in the cloud in months what used to take years. “Over a period of six months, we created an entirely new demand forecasting model, leveraging the capabilities in the cloud,” he says by way of example.
Moreover, IHG’s cloud backbone enables it to take advantage of emerging SaaS offerings, such as Speakeasy AI conversational chatbots, and deliver its own IHG Voice Cloud AI service to help guests and reception desk clerks at hundreds of hotels.
IHG’s cloud transformation is emblematic of a greater trend in the hotel industry, says IDC analyst Dorothy Creamer, who has observed heightened activity among hotels “catching up on or beginning transitions to the cloud.”
“A driver of this is the ability to innovate at scale faster,” she says, noting that 60% of hotels are primarily moving to a cloud-first approach even as they continue to utilize on-premises IT stacks for certain applications. “This is driving a hybrid approach to cloud.”
A multi-partnered strategy for multicloud success
IHG, which got its start on the cloud five years ago, is also taking a hybrid approach, continuing to migrate and develop new workloads on Amazon Web Services and Google Cloud Platform as it maintains data centers on the east and west coasts of the US.
The company, which employs thousands of IT professionals, also works with many SaaS partners and consulting companies to deliver its offerings.
For example, the demand forecasting model, which leverages Google machine learning capabilities, was developed in concert with Boston Consulting Group, says Eric Norman, head of infrastructure architecture and innovation at IHG.
Aviatrix, another IHG partner, provides cloud networking for the company’s multicloud architecture, which includes both AWS and GCP, as well as Microsoft Azure now that IHG’s central booking partner, Amadeus, is migrating there.
“The infrastructure team wants all that to look the same. They want the same networking, the same automation, the same visibility, the same security, all those things remained consistent rather than having to have skill sets in each one of those different clouds and doing it differently in each one,” says Aviatrix marketing executive Rod Stuhlmuller, who has been working with Turner on IHG’s cloud.
IHG also partners with Equinix, which provides interconnects across multiple regions to move data and workloads to and from various regions across the global IHG multicloud architecture with agility and high speed.
Turner says IHG also has reservation management models under development for hotel owners as well as a plethora of chatbots and digital services for guests and hotel owners, including an advanced mobile application that accounts for more than 50% of new bookings.
Thanks to such innovations, digital touch points at IHG have increased at a fast rate. In 2022, 20% of all customer contact with the hotel giant’s 6,100 properties went through digital channels, compared to 4% the previous year. The company’s Speech AI managed more than 3.6 million reservation conversations in its first year and its innovative Digital Concierge has served millions of guest requests to date, according to an IHG representative.
The innovations are also improving customer experience by, for example, enabling them to choose a room with a view or one close to an elevator, and to prepay for parking.
IHG is also communicating with customers through other channels, including Apple Messages for Business, Google Business Messages, and 24-hour text messaging.
And IHG is not alone in the hospitality industry’s move to accelerate digital offerings for guests and operators.
“Cloud and AI are definitely two major drivers for digital-first initiatives for hospitality and travel organizations,” says IDC’s Creamer, referring to the automation of processes and high-touch guest experiences.
“One of the top business objectives identified by hotel executives in IDC research is the ability to innovate at scale,” Creamer says. “Almost half (46%) of hotels say this is the number one priority after driving revenue opportunities.”
The next wave of hospitality innovations may very well be driven by generative AI.
Turner notes that IHG is very interested in generative AI but has only just started investigating opportunities. To that end, the hotel chain has created a steering committee, aware that it must be cautious with such a new technology while recognizing that the commercial availability of ChatGPT means no business can sit on it for too long.
“It’s out there already. And therefore, we’ve been trying to provide the right guidance, tools, and techniques to all of our staff across the world so that they use it sensibly, particularly when it comes to doing things which are relevant to their roles within our organization,” Turner says. “They are quite sensitive particularly about not putting into some of those models confidential information, which could then be out there permanently.”