Taking Holiday Inn Upscale

Can the original roadside family hotel–the same brand that in the 1960s touted free ice and free dog kennels–successfully rebrand itself as an upscale product after years of the same old same old?

FelCor co-founder and incoming IAHI Chairman Tom Corcoran thinks so: "It is my goal, and my expectation, that over the next two years, Holiday Inn will be moved in the minds of the public, our customers, and also our peers in the industry, to the upscale sector, as defined by Smith Travel," he said at last week’s IHG Owners and Investors Conference in Los Angeles.

And IHG Chief Executive Andy Cosslett agrees, saying: "Moving Holiday Inn up a segment, to compete with Courtyard By Marriott and Hilton Garden Inn—I agree with Tom. I prefer not to classify the segment, but I share the principles and philosophy behind Tom’s point. We’re positioning Holiday Inn as a very different product than it has been for the previous 10 to 15 years. I think over time, [moving up] is a very good target to give ourselves." 

What will it take to get there? Completion of a global rebranding effort that has already seen some 150 Holiday Inn hotels relaunched with new signage, new features and a new service culture (IHG plans to have another 500 Holiday Inns relaunched by the end of 2009; and hopes to complete all 3,200 properties worldwide by the end of 2010).

What would be the reward of a successful relaunch? Corcoran thinks a US$10 increase in ADR is achievable. And Cosslett says hotels that already have instituted the new service culture and moved to the new look and feel have seen success in being able to move rate, citing the Holiday Inn London-Heathrow as an example. 

So what will be the ultimate test for IHG and Holiday Inn? It will come in the third and fourth quarters of 2009, after the launch of a major marketing campaign to introduce the new Holiday Inn. The main goal of that campaign, says IHG Chief Marketing Officer Tom Seddon, will be to "generate re-trial."

So the test first will be whether long-lapsing guests make reservations, and second, if they do, whether they continue to make reservations after the initial re-trial…

Only time will tell of success or failure, but until we find out through customer behavior, do you have a prediction on whether Holiday Inn will work as an "upscale" brand?