Case 3: Intercontinental Hotel Group’s Entry into China*
During the one-month period from June to July 2006, InterContinental Hotels Group (IHG) opened four hotels in China: Crowne Plaza Changshu, Crowne Plaza Fudan Shanghai, Holiday Inn Jasmine Suzhou, and Holiday Inn Seaview Qinhuangdao, adding more than 1,100 hotel rooms.1 In February 2006, IHG signed six hotels with Chengdu International Exhibition & Convention Group in Sichuang province and four hotels with Shanghai Greenland Group, adding almost 6,000 rooms in China in two weeks.2,3
The current goal of IHG is to promote “faster growth by making IHG’s brands the first choice for guests and hotel owners.”4 This description is not only a forecast of its future directions, but also a summary of its expansion history. As of December 2007, IHG manages 76 hotels in China, making it one of the largest international hotel chains there. Among these hotels are the following brands: 10 InterContinental hotels, 18 Crowne Plaza hotels, 39 Holiday Inn hotels, and 9 Holiday Inn Express hotels (Exhibit 1).5 The overall global target of the group is to increase the number of properties in China to 125 by the end of 2008.6
Written by Zhaoping Liu, who is a doctoral student at the Cornell University School of Hotel Administration. This case study was written for the purposes of classroom discussion.
*I have benefited from the suggestions from Bin Dai, Chuntian Liu and Zhijun Zhang. Part of “the history of InterContinental” section was revised from the Six Continents case written by Adam Baru, Yinian Hou, Vikas Patel, Bill Spinnenweber, Anjali Talera, and Kem Wilson under the direction of Jeffrey S. Harrison. Lin Kuang and Shenghui Zhou provided some data and references. Special thanks to Cathy A. Enz for her constructive and thoughtful comments.
History of Intercontinental
InterContinental Hotels Group, formerly Bass PLC, was founded in 1777 by William Bass, when he established a brewery in the English town of…