From growth to tech investments, hospitality needs to balance “guest experience with owner expectations”
It’s a sign of the better times we are in that when Kenneth Macpherson, the CEO for Europe, Middle East, Asia and Africa (EMEAA) for IHG Hotels & Resorts, was visiting his team in Singapore for the first time in two years, I was in Siem Reap, Cambodia – and so we caught up over Teams the following week.
The difference is, Macpherson is based in London, a city that has moved on and has lifted all Covid restrictions, while in Singapore, we are still dancing around with restrictions and reopening of borders in the region, while happening, comes with varying conditions.
For Macpherson, whose daughter was born in Singapore, the visit was like coming home. “It was so good to see the team in person. I was encouraged by the optimism of recovery and, at the same time, impressed by the patience of our partners. It was really good to see that spirit of recovery coming through.”
Asked to compare London, which has scrapped all Covid-related restrictions on travel and daily life, with Singapore, which still has its Vaccinated Travel Lane approach and restrictions on daily life, he said, “As I would have expected, there is a great balance here for the pace of recovery and the comfort of Singaporeans and to make sure people are living with the virus in an organised way.”
Kenneth Macpherson: “Encouraged by the optimism of recovery and, at the same time, impressed by the patience of our partners.”
Macpherson has oversight over 1,000 hotels in the group, many of which are in Europe, which are bound to be impacted by the ongoing war in Ukraine. Asked what it was like to move from a global pandemic to a war, he said, “Our overwhelming perspective is one of recovery. We have seen that the model of vaccinations and confidence in health care systems has allowed governments to lower restrictions and that is leading to a return in travel.
“We have seen lots of evidence of this. There’s the return of business in the US which was above 2019 levels last December. South-east Asia is slower but we are seeing positive actions from Singapore, Australia, Thailand, Vietnam, Cambodia, Malaysia – all of these need focus and attention, and we want to focus on guests and owners to balance recovery and the financial position.”
Saying it was monitoring the situation in Ukraine very closely, he said, “Our primary concern is for guests and colleagues in our two hotels in Kviv – InterContinental and Holiday Inn.”
He said in the UK, which was “walking the talk in terms of living with Covid”, it is tremendous to see the demand returning and international travel coming back.
“Let’s retain the optimism. We have seen that demand comes back very quickly and it is important that as we manage recovery, we keep the focus on guest experience. Expectations are very high, travellers are coming back and that’s wonderful and as an industry, we need to manage that experience. We need to ensure that colleagues in hotels are able to deliver true hospitality.”
Acknowledging that the talent situation has become more challenging due to Covid, he said, “I would advise as much collaboration as possible with industry and governments to be able to provide the context for the restarting of hotels.
“The industry has been impacted. There is financial pressure by asset owners and we need to balance how we deliver that with caring for our people who are on their own journey to adapting to coming out of Covid.”
While he is confident that IHG remains a strong employer brand to attract people, “we have to recognise that people have shifted their perceptions of hospitality as a career”, he said.
In Australia, it introduced myflex, an innovative life/work initiative rolled out in October 2021 that will make IHG one of Australia’s most flexible hotel employers. New employees who sign up with IHG as a myFlexer plugs into the system and will get full flexibility to choose their hours and balance their work/life commitments.
He believes hospitality has a strong story of growth to tell. Citing STR data, which is projecting a 26% growth in hotels in the next five years in Asia Pacific, Macpherson said, “This extraordinary growth potential, Covid recovery, longterm demand drivers – that’s a story we can tell.”
Based on FY 2021 results, IHG APAC system size had a 11% YOY increase from 2020 to 2021. “We opened a total of 300 hotels last year,” he said, as he rattled off the list of IHG brands that opened from Kimpton in Ko Samui to Indigo in Adelaide, Holiday Inn Express in Osaka, Crowne Plaza in Phu Quoc, Vietnam. In Singapore, the Voco brand launched with the takeover of the former Hilton Hotel.
“Here is the growth we have delivered, the opportunities we have created,” said Macpherson. “Understandably, asset owners are going to be focused on the financial returns of their investments.”
One way of achieving better returns for owners is through investing in technology, which is a global priority. “From harnessing tech in how we run hotels, to the myflex tech in Australia to manage staffing, we are also investing in our core tech platform and our global reservations system in collaboration with Amadeus,” he said. It is also launching its new loyalty programme app this year.
Lunch with the team at InterContinental Singapore. From left to right, Joff Romoff (Vice President, Commercial, South East Asia & Korea), Serena Lim (Vice President, Development, South East Asia & Korea), Kenneth Macpherson (CEO for EMEAA), Mustafa Denlisoz (Head of HR, South East Asia & Korea) and Rajit Sukumaran (Managing Director, South East Asia & Korea)
He believes though that it will be sometime “before they have robots so good they can replace you and me, that’s a long way off. However, we have better tech that allows us to manage efficiency of operations.
“Sharing my own experience of being here, and being face to face with people, we are a human interaction business that means a lot to a lot of people. Being here is also a great reminder of how valuable it is to be alongside my team for five to six days.”
Agreeing it is volatile times, he said, “I focus on how we lead through volatility. I try not to get too stressed about me and how I am but what I do in the face of challenging times.”
Featured image: Voco Singapore, a new IHG brand arrives in the city state.
