Intercontinental Hotel Group Case Study
InterContinental Hotel Group (IHG) is among the largest hotel of the world and comprises of hotel seven hotel brands. Such as Holiday Inn, InterContinental, Hotel Indigo, Candlewood, Crowne Plaza, Staybridge Suites, and Holiday Inn Express. IHG also has to face the problem of credit crunch due to which their performance and growth has been impacted adversely. This hotel enjoys strong presence in the era of economic uncertainty such as credit crunch and fears of recession because of its famous brand Holiday Inn. However, in these years of crisis the share of the group dropped by about 50% because of presence of credit crunch. This resulted in huge loss for the IHG group due to which the organisation announced fall of about 40% in the first …show more content…
The cost that was required by IHG for rebranding all its hotels was about $1 billion from which the organisation was able to cover only 6%. This means that the remaining cost had to be financed by the local owners of the hotels or by the bank. The financing from local owners was difficult because of credit crunch because the investment companies or bank were not offering debts or loans to the investors. The owners of the hotel argued that they had to face downturn in their business because of credit crunch as well as because of tight cash flow, which occurred due to drop in the business. Hence, this period of financial crisis was very critical for IHG and for the owners of the hotels operating all over world. The literature review stated that all the good credit companies faced problem in obtaining finance from banks in the period of financial crisis due to which many of their projects failed. The organisations did not have enough money for financing operations of the organisation and the newcomers in the hospitality sector were not able to raise finance to start their new business due to credit crunch (Tirados & María, …show more content…
This is the period of financial crisis when the banks or investor company were not able to offer loans or debts to the individuals or owners. This period was critical for the organisations particularly hotels in this sector because they were not able to support many of their projects. It is observed that IHG is among the largest hotels of the world but still it had to face many problems due to credit crunch. Many projects of the hotel such as rebranding of the hotels all over the world failed or delayed because of the period of financial crisis in the United
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