Holiday Inn’s transition meeting with success

ATLANTA— Despite the fact that it is fast approaching 1,000 hotels in the U.S., Holiday Inn is very much a brand in transition as it moves forward on initiatives to remain relevant to today’s guest and profitable for its franchisees. Chief among those initiatives has been the creation of a next generation prototype for its U.S. properties as well as European hotels and a concerted effort to eliminate hotels from the system that do not meet brand standards. According to Kirk Kinsell, chief development officer, Americas, IHG, there has been an internal focus within the global company on the positioning of the brand to its core group of business and leisure travelers against a broadening landscape of new and existing brands positioned for lifestyle guests and Generation X travelers. While pointing out that Holiday Inn was actually the first “lifestyle brand,” he acknowledged it has its sights set on a broader group. “The Holiday Inn customer is not the lifestyle guest. It is everyday heroes that quietly go about their role at work. They are managing their home from away from home. Our brand is focused on being relevant, not design savvy. We emphasize eye-to-eye contact and a return to the hotel experience,” he said. That experience has been enhanced by Holiday Inn in the form of a new prototype requiring far less real estate with only 2.5 acres required as opposed to the traditional 4 to 5 acres. In addition, the new prototype supports less complicated back of house operations and a higher percentage of revenue generating space. The brand, which consisted of nearly 1,400 properties worldwide as of year-end 2006, has 16 new prototypes open and some 175 in the pipeline. The new model is in stark contrast to a portion of the brand’s properties, which had become tired and dated having been built decades ago and which were falling short of brand standards. The company has been diligent about removing such properties from the system. “For our guests, the investors were asked to jump higher. For those who didn’t there would be consequences. The owners were told if their hotel doesn’t match up with the future, they would be replaced. It is a journey that started three years ago. lt is closer to the end [than the beginning],” said Kinsell. Company chief executive Andrew Cosslett also communicated that message to HOTEL BUSINESS® earlier this year. “We’re removing about 20,000 hotel rooms a year. No one else is coming close to that,” he said, adding, “we’re very confident the Holiday Inn estate will be in a dramatically better place in 2008 and 2009 than it was in say 2002.” Working to ensure the brand’s continued improvement, IHG has taken a long hard look at every aspect of Holiday Inn, according to Kinsell. “How do you make sure your name is as relevant as it needs to be. We looked at everything from the imagery to the logo; it’s all in the sense of continuing to grow Holiday Inn,” he said. Kinsell points out the advantages of the brand’s large scale with benefits like rewards programs that produce a constant flow of repeat guests. “When you look at Priority rewards, only big brands can do that kind of stuff,” he said. The brand has also been quite focused on international growth as well having just launched a new Holiday Inn for Europe with some unique design aspects. In addition, IHG recently inked a 20-year licensing deal with Kew Green Hotels to convert 11 Courtyard by Marriott properties to Holiday Inns this month. Meanwhile, the Holiday Inn Express brand— which as of presstime had nearly 1,700 hotels worldwide and 574 in the pipeline— has continued to grow its presence as well. The company just launched a hotel franchising program for the brand in China. This follows the opening of the first six Holiday Inn Express hotels and the signing of close to 20 additional management deals for the brand in Greater China.