IHG maximizes hospitality with multi-cloud
For IHG Hotels & Resorts, the cloud provides the sweet spot for business success. “First and foremost, we see our journey to the cloud as the most important part of both our technology and business strategies,” says George Turner, chief commercial and technology officer at the British multinational, which relies heavily on its cutting-edge cloud infrastructure and chatbots. , and artificial intelligence to drive more digital business across its 19 hotel brands — and more on 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 essentially a technology product developer that works to boost occupancy rates and revenues for the 6,100 hotels owned by its franchisees.
Turner helps achieve this success by wearing two company hats: He oversees a product-driven organization that must continually develop and deliver innovative services to hoteliers and guests even as his teams continue to build IHG’s internal technology and services portfolio.
The chain’s massive multi-cloud architecture, underpinned by Aviatrix cloud networking and Equinix interconnect technology, is what enables Turner to bring the hotel empire closer to its key customers – business and leisure guests, as well as hoteliers.
The cloud also helps IHG “increase the business value of our organization,” Turner says, noting that IT professionals can innovate in the cloud within months that used to take years. “Over six months, we built a completely new demand forecasting model, leveraging existing capabilities in the cloud,” he says, for example.
Furthermore, IHG’s cloud backbone enables it to leverage emerging SaaS offerings, such as the Speakeasy AI chatbot, and offer its IHG Voice Cloud AI service to assist guests and front desk staff at hundreds of hotels.
IHG’s cloud transformation is emblematic of a larger trend in the hotel industry, says IDC analyst Dorothy Kramer, who has noted growing activity among hotels to “keep up or start shifting to the cloud.”
“This is driven by 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 use on-premises IT stacks for specific applications. “This leads to a hybrid approach to the cloud.”
Multi-partner strategy for multicloud success
IHG, which got its start in 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 United States.
The company, which employs thousands of IT professionals, also works with several SaaS partners and consulting firms to deliver its offerings.
For example, the demand forecasting model, which leverages Google’s machine learning capabilities, was developed in coordination with Boston Consulting Group, says Eric Norman, head of infrastructure engineering and innovation at IHG.
Aviatrix, another IHG partner, provides cloud networking for the company’s multi-cloud architecture, which includes both AWS and GCP, as well as Microsoft Azure now that IHG’s central reservations partner, Amadeus, has moved there.
“The infrastructure team wants it all to look the same. “They want the same networks, the same automation, the same visibility, the same security, all of those things to remain consistent rather than having to have skill sets in each one of those different clouds and do it in a uniform manner.” Different in each one,” says Aviatrix CMO Rod Stuhlmuller, who has been working with Turner on the IHG Cloud.
IHG also collaborates with Equinix, which provides cross-region interconnections to move data and workloads to and from different regions across IHG’s global multi-cloud architecture with high agility and flexibility.
IHG also has reservation management models in development for hoteliers as well as a slew of chatbots and digital services for guests and hoteliers, including an advanced mobile app that accounts for more than 50% of new bookings, Turner says.
Thanks to these innovations, IHG’s digital touchpoints have increased at a rapid rate. In 2022, 20% of all customer communications with the hotel giant’s 6,100 hotels took place via digital channels, compared to 4% the previous year. The company’s Speech AI system managed more than 3.6 million booking conversations in its first year, and its innovative digital concierge has served millions of guest requests to date, according to an IHG representative.
Innovations also improve customer experience, for example, by enabling them to choose a room with a view or a room close to the elevator, and to pay in advance for parking.
IHG also communicates with customers through other channels, including Apple Business Messages, Google Business Messages and 24-hour text messaging.
IHG is not alone in the hospitality industry’s move to accelerate digital offerings for guests and operators.
“Cloud and AI are certainly key drivers of digital-first initiatives for hospitality and travel organizations,” says IDC’s Cramer, referring to process automation and high-touch guest experiences.
“One of the most important business goals identified by hotel executives in IDC research is the ability to innovate at scale,” says Kramer. “Nearly half of hotels (46%) say this is their top priority after increasing revenue opportunities.”
The next wave of hospitality innovation may be very much driven by generative AI.
Turner points out that IHG is very interested in generative AI but is just beginning to explore the opportunities. To this end, the hotel chain established a steering committee, realizing that it would have to be careful with such new technology while recognizing that the commercial availability of ChatGPT meant that no company could stay on it for very long.
“It’s already there. Therefore, we try to provide the right guidance, tools and techniques to all our employees around the world so that they can use them sensibly, especially when it comes to doing things that are relevant to their roles within our organization,” Turner says. “They are very sensitive, especially in terms of By not putting confidential information on some of those forms, which could be there permanently.”