Interview: How IHG Used Consumer Insight To Engineer An Efficient, Budget-Friendly Hotel Brand

Interview: How IHG Used Consumer Insight To Engineer An Efficient, Budget-Friendly Hotel Brand
Brand Activation & Immersion

The hospitality group used feedback and data to build a new hotel brand, Avid Hotels, specifically designed for the young, professional, and value-conscious traveler

Avery McCaffrey
  • 22 october 2018

Photographer: Chris Sanchez

Hospitality group IHG, owner of sub-brands including Intercontinental, Kimpton and Holiday Inn Hotels, recently expanded its offerings with a new chain, Avid Hotels. Using an elaborate customer segmentation and testing process, IHG identified its target guest, the “Principled Everyday Traveler,” and that traveler’s specific needs. With a no-frills design, Avid Hotels are meant to deliver a seamless customer experience and great night’s sleep without the bells and whistles of a luxury hotel.

Just following the opening of its first location, in Oklahoma City, PSFK spoke to Jennifer Gribble, VP of Avid Hotels and Mainstream Growth, IHG, to take a look inside the hospitality group’s strategy for creating an affordable and reliable hotel experience.

PSFK: What are some broad trends you’ve noticed in the hospitality space that you’re leveraging in the Avid Hotels brand?

Jennifer Gribble: For Avid hotels, we did a large consumer segmentation—we spoke to travelers and then we were able to group travelers with similar needs.

That helped define our target guest, which we called a Principled Everyday Traveler. As we created a brand, we looked to really understand that traveler. We weren’t as much leveraging trends to develop Avid as we were just really getting to know this consumer.

We wanted to understand their needs at the hotel but we also wanted to really understand who they were as people, because if we could figure that out, we could design an experience that would really resonate and that would be winning in the industry. That was critical for us.

Of course there are trends like technology, and what we find about these consumers is that they’re connected as well, which manifests in the experience with things like our IHG studio platform, which seamlessly connects consumers’ devices to the T.V. so that they can stream their own content. That’s where we see the intersection of trend and our consumer insight that we have.

Another trend that we see generally is that design is becoming important to everyone. We knew we wanted to design something that really resonated with the consumer, that provided high‑quality and great functionality, and so that’s been an important part of this brand’s proposition.

Photographer: Justin Kriel

To reach this connected consumer, are there any particular strategies that the Avid brand has been employing?

Yes. Obviously the connected guest is across many different brands at IHG, so we take an enterprise approach to this with our IHG mobile app. It’s an important application for our guests to be able to book quickly, check their account balances, book award nights and we continue to enhance the functionality of that.

And then additionally, we’re rolling out new platforms at IHG. Our new reservations system, called IHG Concerto, is really important to the future of the company and how we’re able to understand things like guest preferences over time and help deliver easier, quicker booking, which is really important to the Avid guest.

Are there any other technologies that Avid is prioritizing?

We’ve been very focused [on technology] with this brand. These guests don’t need the bells and whistles for just the sake of technology—it’s really just about homing in on the things that they want at the moment. Top of their list was the ability to stream content.

Where do you see the Avid brand fitting into the hospitality space as it exists today?

What we discovered when we did the segmentation study was that there were about 14 million under‑served travelers in the particular segment, and they represent about $20 billion in annual industry revenues. These are travelers that today just don’t have the great travel options.

They were telling us that they don’t trust a single brand because there’s so much inconsistency, and so while they find some great hotels out there, they need to do a lot of research to find those hotels.

They’re looking for a brand that they can trust and that’s where Avid can play a large role. To do that, we knew we needed to be disruptive and we really needed to think about the offer in this space to make it work for guests but also to make it work for owners. We’re taking a really different approach to travel in this segment.

How does Avid plan to gain market share?

From a product perspective, it was really important for us to rethink what a brand looks like in this particular part of the segment, and make some big decisions. Avid is an all-new construction and we’ve made choices to make sure that we deliver the right quality and consistency. So, as an example, guests told us that they didn’t need as much room as they typically have in this particular segment, so we’ve reduced the footprint of the guest rooms.

Doing so allowed us to upgrade significantly the experience—we deliver a room that’s designed for sound sleep. We deliver a focused, high‑quality breakfast. Then we’ve also been able to do things like upgrade the technology in the room.

It’s also about delivering a high‑quality mattress with great linens, choice of pillows, complete blackout shades. We made design choices that minimize the noise in the rooms and the transfer between rooms. So we have furniture that’s lifted off the ground, and doesn’t have drawers that can bang against the wall, or closet doors, yet it’s not lacking any function for the guests.

Can you explain why you chose Oklahoma City for the first opening?

What’s really important as you develop and launch a new brand is that you have an incredible sponsor and we had an owner advisory board as consultants to us throughout the entire brand development process. One of the owners on the advisory board stepped forward and wanted to open the first Avid hotel with us, and he knew the brand really well. He said he would like to do it in Oklahoma City and it’s a really compelling market for Avid hotels. It’s located just north of Downtown Oklahoma City.

There are lots of businesses, a medical center in the area, so lots of strong demand generators, which is important for success with this traveler. Also, there’s lots of leisure activity.

There are neighborhood churches, sporting leagues, etc. that drive the weekend business as well as that weekday business. So, it’s a great market for an Avid hotel.

Could you expand on what “the basic done exceptionally well” means to Avid?

Guests were telling us—we call them the Principled Everyday Travelers—they would say, “For my everyday travel, all I need is this,” and they were just looking for a great night’s stay.

All they need to do is get a good night’s sleep and then they’re off in the morning. They’re only staying with us one or two nights, and so, the basics done well is about delivering a great night’s sleep but elevating it. That informed our room design for sound sleep and how we’ve significantly elevated the guest rooms.

Photographer: Chris Sanchez

Beyond the quality of the guest rooms, what experience does Avid offer that really differentiates it from competition?

We have a premium coffee experience of bean‑to‑cup coffee that’s available 24 hours a day. We have still and sparkling waters on tap in addition. We have our Avid guarantee and that’s important because these guests  haven’t had a lot of great travel experiences in this category, so they’re nervous.

They want to make sure when they choose Avid hotel, they have a lot of confidence. When a guest shows up, we let them know that if their room isn’t just right, we’ll make it right, and if we can’t do that, we’ll refund their rate. That’s been really important and a strong differentiator for Avid hotels.

With the rising  interest in wellness, does the hotel’s design consider health and fitness at all?

We have an incredible fitness center at the hotel. Then we have health‑minded options at our grab‑and‑go breakfast as well.

Could you explain the related loyalty program and its rewards? How do you incentivize customers to sign up?

Avid hotels is part of our IHG Reward Club program. Just like at all of our other IHG brands,  you can earn 10 points per dollar when you stay at an Avid hotel. It’s a really strong proposition.

For guests that arrive at an Avid hotel that aren’t part of the program, we like to share what the program’s about and invite them to join.

How do you see the Avid brand evolving in the next five years?

We launched Avid hotels approximately a year ago, making it available for sale for owners to purchase a franchise. We’ve had a really strong reaction to this brand. There’s great momentum and so I think over the next five years you’re going to see some significant growth from Avid hotels.

We believe it can be a large‑scale player. It’s a hotel brand that can grow in many different market types. So we’ve been signing some things like airport markets, suburban markets, more urban ones and universities. I think you’ll see Avid hotels pop up in a number of different locations.

Additionally, we’ve launched Avid hotels already in Canada, Mexico and now this week in Germany.

Photographer: Chris Sanchez

How do you see the hospitality space evolving as well?

In hospitality we’ve generally seen strong growth from mainstream limited service segments.

Owners find the segment really attractive, because it delivers solid returns with a nice simple operating model. It’s important to know how owners think about it because they help fuel growth, along with the guest plans. We continue to see strong guest demand in this space, too.

We feel really encouraged with what’s happening in the industry as a whole and that it will be key to the continued growth of Avid hotels.

To help us with that owner advisory board and just general brand development, we did a lot of rapid iterative prototyping. We had a warehouse in Atlanta where we did this prototyping and it was really valuable for us to move quickly and get the final product right.

We had owners and guests come through to give us feedback, and it was very powerful. They didn’t actually stay overnight in the model rooms, but we had them do things like come into the room with a roller bag and tell us where they would put it, exercises like that.

From the owner perspective, we had housekeepers come in and tell us how they would clean, or anywhere it could be hard to clean—so we got the design right from an operational perspective. When we opened the doors on our first one, we really had the details right.

IHG


IHG’s Avid Hotels brand is listening to its consumers to develop the optimal travel experience for its value. For more ideas from similar inspiring brands, see PSFK’s reports or newsletters.

 

Photographer: Chris Sanchez

Hospitality group IHG, owner of sub-brands including Intercontinental, Kimpton and Holiday Inn Hotels, recently expanded its offerings with a new chain, Avid Hotels. Using an elaborate customer segmentation and testing process, IHG identified its target guest, the “Principled Everyday Traveler,” and that traveler’s specific needs. With a no-frills design, Avid Hotels are meant to deliver a seamless customer experience and great night’s sleep without the bells and whistles of a luxury hotel.

+avid hotels
+brand activation & immersion
+hospitality & travel
+hotels
+ihg
+Interview
+loyalty & membership
+Millennials
+post purchase & service
+Public
+store experience & design
+travel

Learn About Our Membership Services

Need Research Help?
As a member you can ask us any research questions and get complimentary research assistance with a 4-day turnaround. Reports inclde stats, quotes, and best-inclass examples on research topics.
Remain Informed & Strategic
We publish several trends reports each month. By becoming a member you will have access to over 100 existing reports, plus a growing catalog of deep topical analysis and debrief-style reports so you always remain in the know.
See Trends Come To Life
Meet your peers and immerse yourself in monthly trend and innovation webinars and discounted conferences.
No search results found.