Why InterContinental Chose to Relaunch Holiday Inn

Five Questions for CMO Tom Seddon

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NEW YORK (AdAge.com) -- InterContinental Hotels Group earlier this summer announced the opening of its 1,000th relaunched Holiday Inn hotel: the Holiday Inn Express New York Times Square. The opening was part of an overall $1 billion relaunch of more than 3,200 Holiday Inn and Holiday Inn Express hotels worldwide, as well as the opening of another 1,050 hotels featuring the new branding over the next few years, with the completion of the global relaunch set for 2010.

Tom Seddon
Tom Seddon
It's a massive undertaking for IHG, which owns, manages, leases or franchises, through various subsidiaries, more than 4,200 hotels and over 620,000 guest rooms in nearly 100 countries and territories. Other brands in IHG's portfolio include InterContinental Hotels & Resorts, Hotel Indigo, Crowne Plaza, Hotels & Resorts, Staybridge Suites and Candlewood Suites.

But Holiday Inn is IHG's largest in terms of hotels and rooms worldwide, said Chief Marketing Officer Tom Seddon, and the timing of the revitalization project -- which started two years ago -- was right, despite the unanticipated recession that's occurred in the process, he said.

Calling Holiday Inn's target market "the everyday hero ... a sports coach, salt-of-the-earth person, someone who's trying to help out in the neighborhood," Mr. Seddon said the relaunch is in response to its target's needs and features upgraded and decluttered lobby areas, a Holiday Inn scent and sound, new bedding, upgraded showers and bathroom amenities, and new signage with the redesigned logo.

A multimillion dollar, multichannel ad campaign accompanied the Holiday Inn redesign and includes TV spots from McCann Erickson, New York, that focus on the changes taking place in the hotel properties as well as current strategic alliances with Major League Baseball and Richard Childress Racing. And a soft launch of cleaner and more modern Holiday Inn and Holiday Inn Express websites took place June 26.

Overseeing the marketing behind the relaunch, Mr. Seddon, who joined IHG from Subway, where he was CEO of the company's franchisee advertising fund trust, had previously worked for IHG in the U.S. in a number of senior roles including senior VP-Americas brand performance. He also headed up sales and marketing for the Holiday Inn brand family in the Americas from 1997 to 2000.

In a recent interview with Advertising Age, Mr. Seddon discussed why IHG chose to relaunch Holiday Inn, how the recession's impacted plans and why the brand doesn't rely on traditional media.

Ad Age: So why work to revitalize Holiday Inn now?

Mr. Seddon: We've been working for about two years on the program. Overhauling a brand takes about four years to make it happen. And the reason is really to respond to consumers' changing needs. We really didn't plan for a global recession halfway through.

Ad Age: How has that shifted things?

Mr. Seddon: Obviously, business is down for everyone, but what we're doing is bringing to market a refreshed, mainstream, midmarket, full-service hotel, and that's what companies are looking for these days. They're looking to put their travelers in something that's a bit more affordable, and Holiday Inn is the perfect answer.

Ad Age: What about for leisure travelers?

Mr. Seddon: Holiday Inn is very strong with leisure travelers. The leisure customer is actually more resilient than the business traveler.

Ad Age: Tell me about Holiday Inn's revamped sponsorship deals with the MLB and Nascar. Why are these so critical to the marketing push for the brand's relaunch?

Mr. Seddon: We've been working with both of those [organizations] for a while, and we've actually found nice ways of using those associations in TV spots highlighting the changes we've made to the hotels. Nascar and MLB have been good matches for us, although traditional media has not been a large part of our spending. You think of hotels as a little bit of a sleepy business, but from a marketing point of view, I find it fascinating that this or that company is making a big shift in their media. We're probably 80% to 85% nontraditional, where many other companies are excited if they are becoming 20% nontraditional. Customers in our business are fairly aggressively moving to the web. So we've responded to that. We're very big in direct marketing. So the sponsorships are nice, but they're really the minority of the mix, rather than the majority.

Ad Age: So is Holiday Inn's positioning really all about price?

Mr. Seddon: No; it's definitely the case that people have become more price-sensitive, but we are in a business where our price-setting has become very sophisticated, and that's how customers buy us. Our prices are largely set by supply and demand in the market, and we're responding to that in real time. It's a mistake to think people are buying solely on price. It's really important what people get for the money. And they're often able to pay for the things they value. Value truly is what people are looking for, and you can see that in how people are shifting their business.

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