At the end of April, InterContinental Hotels Group and Amadeus announced plans to develop a next generation Guest Reservation System (GRS) together. Amadeus will use a new cloud-based community model that is similar to the one it developed for the global airline industry.
As launch partner of the new platform, IHG will work with Amadeus on the design, functionality, and evolution of the system, which will ultimately replace HOLIDEX, IHG’s proprietary reservation system. This follows the completion of an engineering study by IHG and Amadeus to scope out potential technologies and solutions that keep long-term benefits of owners and guests top of mind.
“The next-generation guest reservation system we will create with Amadeus will deliver a powerful global platform for hotels to manage guest interaction, will be intuitive for hotel teams, and will help us accelerate our work to revolutionize and personalize the guest experience through technology,” commented Richard Solomons, chief executive officer of IHG, in a press release.
The community model is a cost effective approach, with Amadeus taking responsibility for funding and maintaining the reservation system and each member paying for usage on a transaction fee basis. Amadeus is building the back-end of the platform, to which other hotel companies can then add their own front-end systems. The GRS gives IHG a foundation to continue to invest in technology through system-funded capital investments and evolve its own systems, which will be connected to the GRS and hotels directly through a separate interface. This will result in a standardized, scalable, and flexible global technology eco-system, the company said.
“To ensure we leverage the opportunity this new platform presents to its full potential, we will be investing additional capital to evolve our own bespoke technology systems,” said CFO Paul Edgecliffe-Johnson on IHG’s first quarter 2015 earnings call. While IHG’s growth CapEx guidance for the full year remains unchanged up to $350 million, Edgecliffe-Johnson said the system funded capital component is now expected to increase from approximately $60 million in 2014 to approximately $100 million in 2015.
The transition to the next-gen GRS, which is due to be rolled out globally in 2017, will be undertaken in phases to minimize risks. In the meantime, IHG continues to make progress with developing digital solutions, such as the rollout of its mobile check-in program. Bookings through IHG’s mobile app now generate more than $100 million per month, Edgecliffe-Johnson said. The company also is making a significant change to IHG Rewards Clubs, with a new top-tier membership being introduced in July. “Developing lifetime relationships is a key pillar of our commercial strategy, and this new offering will allow us to provide more recognition and relevance to our most loyal customers,” Edgecliffe-Johnson said.
