IHG’s Plemmons talks:
• How SME needs are changing
• Business Edge partnerships
• The value of loyalty
While major hotel companies increasingly court small and midsize businesses through dedicated SME programs, IHG Hotels & Resorts was an early entrant in the space, having launched IHG Business Edge in 2018. BTN executive editor for hospitality Julie Sickel spoke with IHG VP of global sales strategy Ryan Plemmons about the shifting needs of SME travelers, how Business Edge has adapted and the role of loyalty in driving program adoption. The following has been edited for length and clarity.
BTN: What's changing for small and midsize businesses that you think is pushing them toward programs like IHG Business Edge?
Ryan Plemmons: Small and midsize businesses are proliferating. They’re expanding rapidly to meet a lot of new needs, from the jobs AI is creating to the demands of energy infrastructure and similar sectors. We do very well with that type of customer across our estate.
We find that SMEs are often juggling many different hats. Think about how many [travel] suppliers you have to engage with—car programs, hotels, air—and travel is just one aspect of the roles these people play. We leave it to them to tell us what they want, and they generally want a simplified solution that gives them the benefits of managed travel without the formality and structure of running a big travel program and a lot of manual effort.
BTN: I've heard SME buyers talk about Business Edge rates as a solution when they can't get static negotiated rates from properties.
Plemmons: We are seeing a shift from static pricing negotiations to dynamic. Business Edge lights up all of our hotels at a very good discount or benefit to travelers without one-by-one hotel negotiations. That's where time savings comes in.
It's widely debated in the hospitality industry what the value of a request-for-proposals season is. It's hard to calculate the returns from a supplier perspective, and very hard from a buyer perspective. So why invest that time? That's the question for a lot of small companies and increasingly for midsize and some larger ones. If you can get a program like Business Edge that delivers a lot of value, why negotiate a static rate?
That said, if you have markets with a concentration of room nights, you can still negotiate a static rate to be included in the program. But the majority of SMEs book on the dynamic discount.
BTN: How are Business Edge members booking?
Plemmons: About 80 percent of our SMEs book directly with us, on IHG.com or the IHG mobile app. Others use travel management companies. Business Edge clients can use any TMC, just like our big managed accounts. We partner closely with providers like Navan and Engine, which have a big footprint in the SME space, and with longer-term partners like American Express Global Business Travel and BCD Travel. The program is channel-agnostic. By joining, SMEs aren't limiting the way they book or the support they might get from an agent.
BTN: How big is the program today?
Plemmons: The statistic I generally use is around 50,000 active accounts on any given day, touching all of our brands in every region of the world. Account sizes range from one person—we had a one-person organization on our customer council who travels basically every week—to as many as 5,000 employees. And we add more SMEs every month.
BTN: How does the Business Edge partnerships program work?
Plemmons: Partner organizations provide benefits to Business Edge members, and we offer those organizations benefits to attract enrollments from their client base.
Airlines are very popular partners. We work with Delta Business Traveler, EasyJet, Virgin Atlantic and Singapore Airlines. Some partnerships are global, like Delta, and others are very regional, because Business Edge accounts are in every corner of the world, as are IHG hotels.
BTN: How do you choose your partners? Is it only other travel suppliers?
Plemmons: We've expanded into adjacent products that SMEs buy. We recently partnered with Headway, a corporate learning platform. Training runs parallel to travel. You don't always think about it, but it's an indirect expense and an important tool to help these organizations run. And when you're in a business like training, you're generally pulling people together, which causes some type of travel. We've looked into other tools SMEs use, like customer relationship management products, and we've done some testing and learning.
BTN: Once a company enrolls, how do you make sure its travelers actually use the program?
Plemmons: It’s an intermediated enrollment, which is where our account activation team comes in. Someone at the [SME's] company decided it was a good idea to enroll, and now they have to convince someone else why to use the program.
We had moved to more of a self-serve approach. But in the SME space, too digital and too self-serve can be the wrong approach. So a few years ago, we put humans back into the enrollment process. Whether it's a very small organization or a midsize one, the activation team walks them through setting up the account and helps enroll their travelers in IHG One Rewards. Since then, the time from enrollment to first use has decreased, and we get much better performance and adoption over time.
BTN: Where does loyalty fit in? Do travelers need to be IHG One Rewards members?
Plemmons: It's not a prerequisite. The person creating the account has to be enrolled, and we work with travel buyers to get their travelers enrolled, but someone who isn't a member can still use the program. That said, a very high concentration of Business Edge travelers are IHG One Rewards members.
IHG One Rewards has been central to traveler adoption. It's one thing for someone overseeing travel to want a program—it's another to get travelers enrolled and happy with it. Every IHG One Rewards member within a Business Edge client program gets an automatic upgrade to Silver status, and helping travelers take advantage of that is one of the activation team's core responsibilities. If we identify higher-frequency travelers, we're sometimes asked about a status match, and we're willing to look at that as part of a more customized activation effort.
BTN: Putting SME aside. In enterprise negotiations, is loyalty becoming more important than rate or is rate still No. 1?
Plemmons: I have a colleague who always answers that question with "yes." The two go hand in hand. You can negotiate a really good rate, but if you're not offering travelers loyalty perks and a great travel experience, they may not use the rate you spent all that time negotiating. If you have one without the other, you're missing the boat.
That's what our research said when we launched Business Edge, and it's what the research says now. Having value for the organization, with all 7,100 IHG hotels lit up on the program, matters, but so does the loyalty benefit for individual travelers. Loyalty isn't becoming more important; it's always been foundational.