2007 Dynamic Dozen Honoree: Interactive Hotel Solutions

In 2004, Interactive Hotel Solutions Inc. made a switch that drastically changed the company’s direction and its rate of growth.

After opening shop in 2001, the online hotel-booking agency spent its first three years focusing on its own lodging Web site – increasing its exposure, tweaking it to rank higher in online search results and making it more user-friendly.

Three years later, IHS saw an opportunity in offering its service to other Web sites that didn’t already offer hotel booking. Though IHS already provided the service for a few select clients, it decided to push its affiliate program. The results were positive: The affiliate program now makes up about 70 percent of IHS’ business.

“We realized we needed to diversify our business,” said Krystal Simon, director of employee relations. “Essentially, we had all our eggs in one basket.”

The change boosted revenues, which grew more than 200 percent between 2004 and 2006. It also created stability, according to President Doug Lurvey.

“It’s a numbers game,” Lurvey said. “If you have five sites trying to do well, that’s not as good as 1,000 sites trying to do well.”

IHS implements hotel-booking systems on Web sites for its clients, many of whom are tourism-related. Others include chambers of commerce and newspapers. IHS sets up the lodging system on each site for free but then shares in the revenue gained through bookings.

IHS also performs search engine optimization for its clients to help their Web sites rank higher when an online search is conducted.

While Lurvey admits that part of the company’s success is due to good timing in the technology industry, he said the main reason for growth is its ability to adapt quickly to a changing marketplace.

“We’re in a very dynamic industry that changes often, and your survival, or even taking advantage of the good times, depends on how quickly you’re willing to change,” he said.

One major challenge is the constant evolution of the Internet and search engines, he said.

“We just have to understand what they’re doing differently so we can change with them,” he said.

Employee involvement

Lurvey said it isn’t easy keeping up, but it’s possible because of how IHS is run: Employees are involved in all aspects of operations.

The company uses Springfield businessman Jack Stack’s system of open-book management, which allows all employees to view company financials. IHS also takes input from all staff on company planning and decision-making.

“There’s just a lot of people involved in the strategy, in what we’re going to do,” Lurvey said. “Our philosophy is, 40 people can make a better decision than six.”

Involving the company’s employees creates accountability, too, he added.

“If we’re making a decision and, several times removed, it makes someone else’s job harder, we have to have an answer for that and be able to live with that,” he said.

Simon said employees also feel as though they are vested in the company through IHS’s Employee Stock Ownership Plan, which was launched in 2005. In 2006, the company contributed its maximum amount of nearly 25 percent to the program.

This year, IHS is taking advantage of its growth to expand its services. In addition to offering hotel accommodations, it will begin selling area rugs and car rentals.

“It doesn’t matter what we sell,” Lurvey said. “As long as we rank on the first page (of online search results), we can sell it.”

Information accurate at the time of the honor.