Warning To Holiday Inn Franchisees: "Contemporize" Or Lose Brand Name

In the latest case of brand enforcement, U.K.-based InterContinental Hotels Group, owner of the Holiday Inn brand, has told its franchisees if they don't "contemporize" by the end of 2010, they will lose the right to use the brand name.

InterContinental started a program to refurbish all Holiday Inns in 2007 in a move to update the hotel brand and make it more contemporary (read that as competitive).

The program included a mandate to meet the company's "minimum quality specifications" by the end of 2010, including better exterior lighting, redecorated lobbies, new bedding, and new signs with the updated Holiday Inn logo. Franchisees are expected to pay for the overhaul – at a cost of $150,000 to $250,000 for each hotel.

The Wall Street Journal reports that some 300 of the 2,700 Holiday Inn properties in North America have not yet begun the refurbishment process. "On the compliance date – Feb. 1 – those hotels will get a failure letter and so will their banks," says Kevin Kowalski, senior vice president of brand management for Holiday Inn.

Another 650 hotels outside North America are also required to comply with the program. Clearly, InterContinental is playing hardball with its brand, but with good reason. The chain is adding newly constructed Holiday Inns and wants both new and older properties to have brand consistency and provide the same quality experience.

Once the leading value-priced hotel chain, Holiday Inn has faced growing competition in recent years. Holiday Inn got its start in the 1950s in Memphis, Tennessee, when America was having its love affair with cars. 

The iconic Holiday Inn sign with its distinct script type became representative of the roadside motel. Modified over the years, that logo is now being replaced with a modernized "H" and simplified type as part of the brand's revamp.