Wake-Up Call for Holiday Inn

by Steve McKee

What do you with a hotel brand that's become outdated, irrelevant, and in some ways a signal to stay away from the properties to which it's attached? If you're InterContinental Hotels Group (IHG), owner of the Holiday Inn franchise, you take a zero-tolerance approach to revitalization.

A November 13 Wall Street Journal story reported that IHG is preparing to pull the Holiday Inn flag from as many as 300 hotels in North America whose franchisees won't spend as much as $250,000 per property to overhaul their lobbies, signage, lighting and bedding, among other things. Said Kevin Kowalski, SVP of brand management for IHG, "On the compliance date, Feb. 1, those hotels will get a failure letter and so will their banks."

Those are tough words, and they back up a tough policy announced back in 2007 - before the recession made financing for such renovations difficult to acquire. But IHG has little choice if it's to keep the damaged brand from sliding into oblivion. It has a responsibility to restore the Holiday Inn brand on behalf of the other 2,400 properties, 1,400 of which were substandard and whose owners have embarked on the required remodeling.

Once one of the nation's leading hotel chains, Holiday Inn milked its half-century of heritage for too long, allowing many of its properties to show (and smell) their age. IHG is doing the best it can to address the brand's long-eroding reputation, having stripped the name from hotels accounting for 125,000 rooms around the globe, according to the Journal. As it does, it continues investing in all-new properties that will aid in revamping the brand's reputation, as well as its Holiday Inn Express sub-brand.

I can't say that Holiday Inn makes list of hotels I might choose for my next vacation or business trip - I've been disappointed (disgusted?) the handful of times when I've had no choice but to stay in one in the past. That said, knowing that IHG is drawing a line in the sand, I'll consider giving the brand another shot. That kind of commitment is worth rewarding.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

UTEK Webinar Synopsis: Regina Lewis - Adopting an Innovation Strategy

I had the good fortune to attend Regina Lewis' webinar yesterday on "Adopting an Innovation Strategy", and will now share some of the notes, quotes, and key insights I was able to capture.

Please NOTE: Because these are notes, they may be a little rough, but I've done my best to clean them up.

Regina Lewis, Ph.D., Vice President of Consumer Insights for InterContinental Hotels Group, wrapped up this informative webinar with her discussion on the impact of adopting an innovation strategy and its benefits to InterContinental Hotels.

Here are some of Regina Lewis' thoughts:

We operate in a franchised environment, and when we come up with any new innovation or update, we have to sell that into the franchisees.

I oversee our innovation insights and innovation research work.

We cannot ignore radical innovations as incremental innovations may be ignored by customers.

We always begin looking at true unmet consumer needs:

• We look at secondary research with "futurists"


• We also look for unmet consumer needs through in-depth exploratory work with our customers via ethnography


• To innovate in hotels you need to have an understanding of how people live

Once we have ideas then we conduct quantitative research with consumers and ask them about the last time they stayed in a hotel and about the next time that they plan to stay.

What are those innovations that can predict increased occupancy?

• We need to go to pilot hotels with statistical choice modeling and a business case


• Then we can isolate the pilot hotels versus control hotels (tracking 1 pilot hotel versus maybe 20 control hotels) to see if it was our innovation that drove changes in occupancy versus some external factor


• We do not sacrifice art for the science to make sure that the fuzzy front end of innovation is driving what we do out there

We have to prove things in the pilor hotels before rolling ideas out globally.

Consumers will not come unless we are giving them something that either rationally or emotionally is important to them.

I hope these notes have given you a good idea of some of what was discussed in Regina Lewis' presentation of "Adopting an Innovation Strategy" and what the key takeaways were. Please also see my blog articles on Gary Hamel's and Tim Jones' portions of the webinar.

Happy innovating!

@innovate