LAS VEGAS—Leaders at InterContinental Hotels Group fully admit that, at one point, the Holiday Inn brand went stale. They seem determined to make sure that doesn’t happen again.
As the Holiday Inn family of brands celebrates the near completion of a three-year relaunch program that freshened the look and service of more than 3,000 hotels, brand leaders are not resting on their laurels. Parent company IHG unveiled a “social hub” concept during its Americas Investors & Leadership Conference that will roll out at Holiday Inn during the next 12 to 18 months.
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A rendering of the Holiday Inn social hub. |
The social hub will take what has traditionally been separate parts of the lobby—the bar, the food and beverage area, the lounge area—and bring them together in one space. “For Holiday Inn we’re looking at two areas, breakfast and bar, and that’s what we’re going to focus on and that’s really the foundation for the social hub,” said Verchele Wiggins, VP of global brand management for Holiday Inn. “The concept behind the social hub is that we’re going to take existing areas in the hotel and morph them together into a single integrated space that really provides an environment to relax, eat, have fun, work, spend time with family, friends or colleagues.”
The Holiday Inn relaunch—which included removing 1,100 underperforming hotels from the portfolio during the past five years—is 82% complete and is expected to be finished by the end of the year. The next step of modernizing Holiday Inn is already underway.
More renovations coming
With the introduction of the social hub, IHG will ask owners to invest another chunk of money into their properties, aware of the financial impact the recent relaunch had. As the new lobby prototype is finalized and implemented in test hotels during the next year, it will debut in new-builds (nearly 800 globally during the next four years) and properties already planning renovations. Retrofit options will follow, and hotels due for their 10-year relicensing contract will be required to add the social hub as part of their PIPs.
“We know that you all worked very, very hard to make this (relaunch) a reality. It took a lot to get every hotel qualified,” said Al Reingold, director of brand management for Holiday Inn Americas. “Now we’re seeing a lot of results come back and they’re very, very positive. Some hotels may want to coast for a while and say, ‘We’ve done the work, we got the rewards and now it’s time to let the benefits come.’
“That would be the worst thing that we could possibly do. It’s just a start. It would be a horrific experience for some hotels to not deliver on this relaunch over the long term.”
As franchisors, IHG hopes Holiday Inn and Holiday Inn Express owners will look to the relaunch as confirmation that injecting capital into properties is a direct correlation to improved guest satisfaction and increased revenue.
“Hopefully they feel, as we do, that there’s enough of a return in this. No one does F&B well in this space,” said Gina LaBarre, VP of brand delivery. “We believe there is much of a differentiator for our brands in doing this.
“As brands, we constantly need to be evolving and improving; there is never an end to the journey. The relaunch is a critical first step, but we’re going to continue to make sure that we’re staying relevant and providing out guests what they need.”
Positive returns
LaBarre said the Holiday Inn brand family is seeing 3% to 4% improvement in customer satisfaction scores and 7% revenue per available room gains in properties that upgraded to the new signage, look and service levels. RevPAR for Holiday Inn is up 36% relative to the midscale-with-F&B segment and Holiday Inn Express is up 20% compared with the midscale-without-F&B segment, she said.
“We’ve seen an uplift in nearly every metric we measure from a relaunch perspective,” Reingold said.
On the Holiday Inn Express side, IHG is scaling back changes to the lobby, but still will introduce a 24-hour market center with grab-and-go options and a new pancake machine.
The pancake machine is currently in 30 test hotels and Reingold said the guest and owner response has been “fantastic.” It will be a Holiday Inn Express brand standard with an implementation date of 31 March 2011. The machine will be free to owners but will require the purchase of batter.
“This is market leading. This is a first in the industry,” Reingold said. “No one else is doing anything right now that even remotely resembles this.”