Tourism Marketing Principles
Executive Summary
This report analyses
the tourism marketing strategies of InterContinental Hotels Group (IHG) and its
internal and external environment. It looks at IHG’s STP strategies, the competitive
landscape according to Porter’s Five Forces, and challenges within the
industry. It has key strengths of an influential presence in the global market,
capabilities of a diverse brand portfolio, and an effective loyalty program.
The weaknesses in the business are the things related to market dependency and
rising competition. There are recommendations for things such as advanced data
analytics, digital marketing expansion, and sustainability. The report
concludes that IHG needs to tailor marketing strategies to get them by getting a
competitive advantage and stay competitive in the transformation of the global
hospitality markets in line with consumer expectations.
Chapter One
An Introduction that Defines Tourism Marketing
Concepts
1.1 Aim
of the Report
This research aims to analyse the marketing strategy of
InterContinental Hotels Group (IHG) to determine the internal and external
environment of the company. This report analyses the problem of how IHG
determines how and why the STP (segmentation, targeting and positioning) can
meet the customer needs and how effective IHG has a competitive position in the
market.
1.2
Structure of the Report
This report is based on five chapters: company background,
internal section, STP, external section, Porter’s five forces, and the development
of the future. In each section, there are insights into what has been improved
in the marketing strategy of IHG.
Chapter Two
Background
of the Company
2.1
Overview of InterContinental Hotels Group (IHG)
The company was established in 1946 years old and is now an
international hotel company – InterContinental Hotels Group (IHG). IHG grew
globally and hit corporate milestones like brand acquisitions and digital
innovations in those years, inclined to move on. It is operational in more than
100 countries through several thousand hotels under a large number of brands
(InterContinental Hotels Group PLC, 2025).
2.2
Introduction to IHG in the Tourism Industry
The different hotel brands that IHG owns and franchises
include InterContinental, Holiday Inn, Crowne Plaza, and Kimpton Hotels. IHG is
one of the largest players in the hospitality industry, competing with other
major global chains, giving importance to customer experience and
sustainability.
Chapter Three
Internal Analysis
3.1
Segmentation Analysis
IHG (InterContinental Hotels Group)
follows a strategic segmentation approach, and it aims to cater to a
diversified customer base. According to the company, it segments its market
based on four such elements:
- Geographic Segmentation: InterContinental Hotels Group PLC is an international
corporation with establishments in more than 100 countries, providing
services with some changes, taking into consideration the geographic
preferences, economic conditions, and cultural requirements
(InterContinental Hotels Group PLC, 2025). They provide luxury
accommodation in the high-end market, the budget accommodation in
developing regions.
- Demographic Segmentation: IHG uses demographic segmentation where it offers
services to different clients based on their age, income, and travel
preferences. Customer segments are business travellers, families, solo
tourists, and luxury seekers. Holiday Inn targets families, whereas
InterContinental aims at high-net-worth individuals and corporate clients.
- Psychographic Segmentation: IHG’s customer lifestyles, values and interests
influence their brand offerings and can be part of Psychographic
segmentation. Boutique-style hotel Kimpton appeals to adventure seekers
and is vocal, which puts a strong emphasis on being a sustainable hotel, appealing
to environmentally conscious travellers (Niewiadomski, 2023).
- Behavioural Segmentation: The analysis segment that IHG conducts is behavioural
segmentation, where it analyses customers’ behaviour as loyalty, booking
frequency, and preferred amenities. Exclusive benefits for frequent travellers
are provided by the IHG One Rewards program to support brand loyalty.
3.2
Targeting Strategy
The differentiation in IHG’s marketing
strategy is that there has been a dedicated range of services for different
target markets. On the other hand, the company bases its marketing on the
specific customer needs:
- Luxury Travelers: IHG’s Regent Hotels & Resorts and InterContinental
Hotels Group PLC (InterContinental Hotels Group PLC, 2025) are Luxury
Travelers serving affluent customers who desire a premium experience,
personalized services, and high-end properties.
- Business Travelers: Corporate travellers can choose Crowne Plaza and
Holiday Inn Express based on their convenience, business amenities, and
flexibility in workspaces.
- Leisure and Family Travelers: Leisure and Family Travelers are offered family-friendly
environments with spacious rooms, entertainment facilities, and child-friendly
services.
- Budget-Conscious Customers: Avid Hotels and Holiday Inn Express aim to connect low-spending
customers who do not want to compromise comfort and quality at any cost.
- Lifestyle and Boutique Hotel
Guests: Kimpton Hotels and Hotel Indigo appeal to experience-driven
travelers looking for unique, stylish, and culturally immersive stays.
3.3
Positioning Strategy
Stoimenov (2023) states that IHG
differentiates itself by differentiating its brands from quality, customer
experience, and innovation. Compared to Marriott International, Hilton
Worldwide, Hyatt Hotels, and AccorHotels the company is placed on the company’s
positioning map.
- Luxury Segment: IHG’s Luxury Segment (part of which competes with
Marriott Ritz-Carlton in the luxury category and Hilton Waldorf Astoria in
the super luxury category) includes: Regent and InterContinental.
- Business Segment: Crowne Plaza rather competes with Hilton Garden Inn and
Hyatt Place in catering to business professionals, Business Segment.
- Midscale and Economy Segment: Holiday Inn is battling for cheap and family rooms with
Best Western and Hampton by Hilton.
- Boutique and Lifestyle Segment:
Hyatt’s Andaz and Marriott’s
Autograph Collection compete with Kimpton and Hotel Indigo, which are
personalized and design-focused properties.
Chapter Four
External Analysis
4.1 Industry Competition (Porter’s Five Forces)
Marriott International (with 7,600
properties, 15.3% market share), Hilton Worldwide (7.1% market share), and Accor
(5.4% market share) are companies operating in the hospitality industry
(Statista, 2025). There is market expansion, brand loyalty and technological
innovation that drive the competitive intensity. Having consistency in brand
reputation and service differentiation is extremely important to keep the market
position.
4.2 Supplier Power
Other suppliers in the industry are
Real Estate Developers, Oracle Hospitality Technology Platform Providers, and
Food & Beverage providers. Approximately 35% of operational expenses are
for real estate. Collaboration with the technology providers further solidifies
strong supplier relationships, as this ties in with strong supplier
relationships and ties back to reservation systems and guest experiences. For
example, collaboration with prominent F&B brands creates customer
satisfaction and loyalty (Birru,
Sudarmiatin, and Hermawan, 2022).
4.3 Buyer Power
The IHG One Rewards with over 120
million members globally (IHG, 2024) loyalty programs has a strong impact on
purchasing decisions, especially. Over 40 percent of global hotel bookings
belong to online travel agencies (OTAs) like Expedia and Booking.com, making
customers powerful as they secure customers through price comparisons and
reviews (Elphick, 2022).
4.4 Threat of New Entrants
Capital requirements, brand name, and
size are the barriers to entry in the hospitality sector, as stated by Team
(2023). For instance, global chains like IHG and Marriott benefit from
extensive marketing budgets and large-scale operations that deter new
competitors. Several hurdles are created for entrants due to regulatory
compliance, including safety and operational standards.
4.5 Threat of Substitutes
The hotel industry has been disrupted
by alternative accommodations, such as Airbnb. In 2023, Airbnb had 448 million
stays, which makes up about 14% of the worldwide lodging market (Statista,
2025). The traditional hotel demand is challenged by changing customer
preferences towards home-like experiences and affordability, and companies need
to innovate and adapt to the new demands.
Chapter Five
Future Development and Conclusion
5.1 Key
Issues from the Marketing Audit
InterContinental Hotels Group (IHG) is
led by a marketing audit that outlines its strengths and weaknesses. Strengths
include global power, a diverse brand portfolio, and a successful loyalty
program. They provide very good customer service for all segments, alike luxury
or budget travelers. There are risks of weaknesses (including the dependence on
effects on specific geographic markets, difficulties in brand differentiation
and vulnerability to economic fluctuations). Another source of external threats
is the increase in external competition, shifting preferences of consumers, and
stricter rules of sustainability (Kotler and Armstrong, 2023).
5.2
Recommendations for Future Marketing Strategy
IHG is looking to strengthen its market
position, it needs to refine its segmentation based on future insights of the
customers through advanced data analytics. To expand digital marketing efforts,
they require expanding their presence through AI and social media engagement to
increase their brand visibility and customer retention. The growth of
eco-friendly hotel operations and other responsible business practices will
support Vibrant growth in the industry, as the consumers' expectations and the
demand from regulatory bodies are changing constantly.
5.3
Conclusion
Marketing challenges faced by the
industry and the new opportunities it offers mandate that IHG adapt its
marketing strategy. IHG can maintain its leadership position in the global
hospitality sector by making improvements in the segmentation strategies,
improving the digital marketing effort, and enhancing its sustainability
initiative.
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