Alf's Articles

How Can You Mend a Broken Brand?

by Alf Nucifora

I recently received a cordial invitation to meet with the brand bosses at Holiday Inn Hotels and their parent company, the Intercontinental Hotels Group. No doubt the invitation was proffered as a result of a previous column I wrote discussing the gradual deterioration of once revered brands. I still hold to the belief that the Holiday Inn brand has been a fading shadow of its former self. Its current incarnation is what inevitably happens when a brand becomes the handed-around, foster child of uncommitted owners and managers.

That said, I approached the meeting with a mix of healthy curiosity and mild skepticism. Undoubtedly, change is taking place at the company's Atlanta headquarters. An acknowledgement of the realities of life has forced a corporate renaming, this time to InterContinental Hotel Group from the previous Holiday Inn Worldwide, Bass Hospitality and Six Continents PLC. One suspects that the new nomenclature will play well on Wall Street. The corporate restructuring, whereby the hotel group stands on its own accord and is no longer associated with ill-fitting divisions such as soft drinks, for example, is sure to focus the brand strategy. There also seems a greater determination to keep the historically-fractious franchisee group appeased and mollified.

An Impressive Line-Up

Although there has been some confusion caused by the proliferation of brands now stabled under the Holiday Inn canopy, the segmentation strategy ultimately makes sense for a hospitality category that is increasingly fractionated by segmented target audience need. As InterContinental Hotel's President, Steven Porter, notes "When business does come back, InterContinental Hotel Group, as a multi-brand, national, multi-segment player, is well positioned to flourish."

The line-up is both intriguing and rational, a flag for every demographic nation. The limited-service Holiday Inn Express talks to the budget-driven traveler; Holiday Inn Select attracts the urban, airport-centric business traveler; the new Sun Spree Family Resorts are joined by the Orlando-based Holiday Inn Family Suites centered around family and kids; the Staybridge brand addresses the extended-stay guest; while the Crowne Plaza properties are attempting to go head-to-head against Hilton, Hyatt, Marriott, etc. for the meetings business. Ironically, the brand with the most potential is the InterContinental chain with wider penetration overseas and untapped growth opportunity in the U.S.

An effective bridge for cross-utilization across these brands may be the Priority Club Rewards frequency program with more than 16 million members. There's one major problem, however. The program is still primarily driven by the loyalty concept, as are the majority of competing hotel frequency programs. If Holiday Inn is smart enough to understand and exploit the CRM potential that lies within that database, the sky's the limit in terms of cultivating individual flag loyalty while promoting cross-brand trial.

And Then There's Holiday Inn…

Mark Snyder, Senior Vice President of Brand Management for Holiday Inn Hotels and Resorts, talks passionately about replicating the Continental Airline experience (going from worst to first). While Snyder's goal is admirable, one wonders if Holiday Inn has a Gordon Bethune (Continental Airline's CEO) to play the role of ayatollah. The current strategy calls for refurbishing the brand with a return to nostalgia, a revisiting of greater times when Holiday Inn was number one. Snyder acknowledges the aging demographic of the customer (45+) and the heavy preponderance of business travelers (70%). But, he believes that he can recapture the brand loyalty of earlier decades by combining nostalgia with the reminder of good feelings that springs from brand familiarity, coupled with a strong value story. It's your basic, return-to-basics story.

It's not a guaranteed strategy, by any means. The business traveler of 2003 is far more discriminating and demanding than the pioneer of the 1970's. In order to re-establish communication and connection with the customer, the older more traditional properties with stand alone air-conditioners that rumble with the noise of a 747, will have to be updated, or cut loose at a faster pace, this in addition to the $2 billion that has already been spent on property refurbishment to date. Inconsistent front-counter service must be made consistent. Snyder notes that the brand will commit $4 million at the property level to this need in the forthcoming 12 months...a good beginning, but only that. An aura of iconic change must continue to surround the brand. One-time events such as "Towel Amnesty Day" must be supplemented with even stronger, repetitive promotional heft, until a critical mass of positive brand noise is achieved. Most importantly, there is the issue of self and social risk. Bluntly stated, it begs the question, do I, as the Holiday Inn customer, feel comfortable and secure in associating with the Holiday Inn brand, from the viewpoint of personal self esteem or how that association will be perceived by my peers?

It will take some time for the verdict to come it. The alternatives, however, are clear. This time around, it's Continental or K-Mart. This cat may be on its ninth life.