IHG launches $1bn Holiday Inn revamp

The Holiday Inn logo, which adorns more than 3,000 hotels around the globe, will be changed for the first time since it was unveiled in 1952.

InterContinental Hotels Group (IHG), which owns the ubiquitous chain, is spending up to £30 million kickstarting the switch to the new signage.

That investment, which will be treated as an exceptional item in its results, includes the cost of commissioning the new design from Interbrand, the global branding consultancy, although IHG is refusing to split out the actual amount.

However, the cost to its army of Holiday Inn franchisees will be somewhat higher. They will face an estimated bill of $1 billion (£488 million) implementing the new look by the end of 2010.

Opinions are likely to be divided over the merits of the garish new green logo, compared with the retro 1950s script that will forever be associated with Kemmons Wilson, who opened the first Holiday Inn in Memphis in 1952. Nevertheless, Andy Cosslett, IHG’s chief executive, claimed that in-depth market research conducted among Holiday Inn customers had also found strong acceptance for what he called a “refreshed and contemporary brand image”.

“Our research is clear: people like it,” he said. “You don’t want to alienate loyal users so the trick is to find a way of keeping the familiarity while making it fresh and relevant.”

Mr Cosslett added: “Signage is very important. We’ve worked out that over 100 million people see our sign every day. It’s a very important part of the marketing of the brand.”

The $1 billion investment by franchisees would cover more than new signage, he said. The company has drafted new brand standards that will see all bedding replaced and fixtures such as lighting and showers improved.

Mr Cosslett revealed that a “scent and music strategy” had also been developed for the chain to enhance the customer experience: “We’re creating a Holiday Inn scent. It’s going to be very subliminal. You’re not going to walk in and find it hits you between the eyes. It’ll be very subtle.”

One change will remove the anomaly whereby the chain’s budget brand is called Holiday Inn Express in the United States and Express by Holiday Inn elsewhere. All will become Holiday Inn Express under a blue sign.

Asked about the reaction from franchisees, he replied: “They vary in terms of their receptiveness. But we think there’s a tangible economic return to the owners from this – there needs to be.” He said that the brand was enjoying “real momentum”, with 1,000 new properties in the pipeline.

Many of these are being built to a recently introduced prototype design. There are 25 prototype Holiday Inns and 200 more planned.

One analyst said: “The new logo is pretty awful. I expect Kemmons Wilson will be turning in his grave.”

Nevertheless, Mr Cosslett insisted that Mr Wilson’s family “absolutely love it”. He said that the new Holiday Inn logo would be used on a hotel to be built in Memphis, together with a small Holiday Inn museum.

Mr Wilson’s son, Kemmons Wilson Jr, said: “Well, if my Dad were here and he saw these changes, I think he would be very excited about what is going on. I think he would say this is exactly what the brand needs.

“This is what the owners have been starving and crying out for and it’s mission accomplished. It’s a new day and we are off and running.”