HOTELS Interview: How IHG is making money with mobile

As vice president of web and interactive marketing for IHG, Michael Menis leads efforts that contribute more that US$3 billion annually to the company. What excites Menis most right now, though, is mobile, an area he says is “exploding” and compares with the Internet in the late 1990s.

HOTELS sat down with Menis at the recent IHG Americas Investors & Leadership Conference in Las Vegas to learn more about his predictions for this next marketing frontier and what IHG is doing to capitalize.

HOTELS: Why is mobile such an important area for IHG right now?

Michael Menis: I think we’re leading the space in the industry. I jokingly say we were the first to enter the mobile space back in 2001. We rolled out a mobile application, which was tethered to the computer. It took about 20 steps to book a hotel, but we were out there. It was early, but we learned a lot through that. Now in the last two to three years we’ve seen exponential growth in mobile. It’s the intersection between smartphones, consumer adoption and travel. It’s just really exciting.

HOTELS: What are some particularly cutting-edge things you’re doing with mobile?

Menis: Mobile’s one of the few technologies that enables us to communicate with the guest through all steps of the process, whether they’re researching, planning, booking or on property. At this conference we’re launching our marketing messages, which we’re pushing out to consumers at the hotels so they can get local offers for the hotel they’re staying at. It might be a special at the bar or a discount for the restaurant, and the hotel is able to manage those messages. Mobile brings with it the opportunity to market to people based on their location, so we’re doing some really exciting things there.

HOTELS: How do you generate new ideas like that? How do you stay ahead of trends in such a fast-moving field?

Menis: It’s amazing how fast things are moving. Just a couple years ago we didn’t think the iPad was going to take off. Now just think about the power of tablets.

I think we learn a lot from the web. We started early a few years ago with our mobile web, just to make sure the websites worked well on a mobile device. I’ve spoken at a number of conferences, and people are often intimidated, not knowing where to start a mobile strategy, but if your website doesn’t resolve well on a mobile device, then you’ve lost that customer. So we started there a few years ago and just really started to generate some revenue and momentum there, and then we evolved into apps.

One of the other things we learned was our first Priority Club application for iPhone really functioned a lot like our website. You’d load the application, and you might get a homepage and enter your city and dates and go to book a hotel. Then we learned the bulk of reservations coming through that channel are for hotels within a radius of where the person was standing. So how do we leverage that location-based data to make sure we can make the process more efficient, faster? We redesigned the website in one of our releases so that now we start with the idea that we know where you are, and we’re showing you hotels that are around you. Now, you can search for other markets and other cities.

HOTELS: How do you measure the success of your projects?

Menis: We do look primarily at revenue generation. We’re a very metrics-driven organization. We track and measure almost everything. We’ve had a lot of successes with mobile, and that helps to gain some momentum to enable you to do some things like our InterContinental cookbook application.

So we really got some momentum on the revenue side. We’ve been public in saying that roughly two years ago we did about US$2 million booked through a mobile device, which quite honestly, we thought was a lot of money. This year we’re on pace to deliver close to US$130 million. At the end of the day, it’s in its infancy. When you think about tactics, we do have an eye on revenue, and we want to make sure we can capitalize on the medium and roll out the right solutions. Where it makes sense, we’ll roll out solutions that map back more towards brand support and love.

HOTELS: Is there ever a risk of being too cutting-edge or too far ahead of the curve in terms of what consumers are ready for in this area?

Menis: We tend to foster a test-and-learn philosophy. In that environment you have to be comfortable with rolling things out that may not be successful, or you may have to modify them in order to make them more successful. I think we embrace it. We embrace the changes. We embrace the way consumers are changing the way they research, book and learn about travel. We need to stay on top of it. We try as much as we can to stay ahead of the curve. You have to be comfortable always learning.

HOTELS: What could the industry as a whole be doing better in web and interactive marketing?

Menis: Many in the hotel industry were probably a little too slow to adopt a mobile strategy. I’m proud of the work that we’ve done early on to try to capitalize on that.

I feel that IHG is pretty aggressive in the online marketing space, trying to drive as many consumers to our direct websites as possible, and I think we lead the industry in that area. We’ve got a comprehensive online strategy that includes everything from a global search engine marketing campaign buying millions of keywords in 15 or so languages to an affiliate program and online marketing program.

HOTELS: What are your thoughts about what the next big things will be in this area?

Menis: There are a lot of insights to take from social and what we can learn from consumers’ desire to share information and how that information helps influence people’s decisions. I think we’re still in our infancy as it relates to our understanding of social and what it means for revenue-generating activity. I think we’re going to see quite a bit of evolution as that matures.

Michael Menis
Michael Menis