Date: February 11, 2010
Title: Relaunch Aims to Put Holiday Inn Back on Travelers' Maps
Summary: With the Holiday Inn brand struggling with consistency across properties and brand image in general, Intercontinental Hotels Group made a decision to relaunch the brand and remove flags from all properties not complying with new standards. Now, Holiday Inn and Holiday Inn Express are among the most successful brands in the industry.
Reflection: A brand-wide mandatory revamp is a move that is going to get a lot of attention. This decision by IHG has been covered widely by many publications and admired by the entire industry. In a market where there is little capital investment taking place, IHG was able to get many of their hotels to invest millions of dollars in their properties in order to keep their flags.
The most important change that I think took place in the revamp has to do with the consistency of the brand. As an international brand with such a large volume of rooms that mostly draw overnight travelers, consistency is paramount. Consistency creates loyalty and when your flag can be found in almost every major city, loyalty is very profitable.
Now, about half of the hotels flying the Holiday Inn flag have been relaunched. With the brand's growing success and popularity, the decision for the remaining hotels should be a no-brainer.
It should also be noted that IHG assumed substantial risk with the revamp. Franchisees not looking to invest in refining their properties lose their flags, which in turn, results in a decrease of management contract revenue.
Source: The Columbus Dispatch
Hyperlink: http://www.dispatch.com/live/content/business/stories/2010/02/11/holiday_inn.ART_ART_02-11-10_A8_T4GICJB.html?sid=101
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While I understand that IHG was able to get"many of their hotels to invest millions of dollars in their properties", I do not understand how they went about this and what approaches they took to each property. It would be helpful to my knowledge that that of other readers to know how this is possible.
ReplyDeleteOverall this move does help loyalty as mentioned in the post. The "consistency" that the brand now shows will make guests want to stay at a property with the flag no matter where in the world they are.
Even though risks had to be taken, I also agree that it is a "no-brainer" for others to follow, and make changes that will create new and more loyal customers. Overall, Holiday Inn showed that the risk was worth the reward.