Wake-Up Call for Holiday Inn

What do you with a hotel brand that’s become outdated, irrelevant, and in some ways a signal to stay away from the properties to which it’s attached?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.

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 https://twitter.com/whengrowthstall.