• by Sarah Mahoney  @mahoney_sarah, October 25, 2007

Holiday Inn is getting its first new logo ever, as part of a sweeping $61 million rebranding effort. In addition to dramatically different signage, InterContinental Hotels Group, which owns the brand, is also asking franchisees to kick in $1 billion for upgrades, focusing on areas that matter most to guests--including shower-curtain rods.

While the brand itself may be a little dusty, it's still a behemoth. Launched in 1952, it accounts for almost 25% of the industry's mid-scale lodging segment in the U.S., and with 100 million room nights a year, "is the most 'stayed-in' hotel brand in the world," the company says.

But after spending more than two years on "the industry's largest piece of consumer research," says a company spokesperson, "encompassing more than 100 different brands and more than 18,000 people," Holiday Inn realized that it was time for some changes. "About 90% of what's important to guests in a hotel stay is a modern, clean, safe property with efficient, friendly service that affords a great night's sleep," he says. "We are focusing our efforts on fine-tuning those key areas, rather than creating innovation for innovation's sake."

As a result, the $1 billion improvements will include fresh, white triple-sheeting and pillows that come in two comfort levels: soft and firm. Bathrooms will be enhanced to include an improved shower head that offers superior pressure, "as well as a signature shower curtain with curved rod and new amenities to deliver a consistent bath experience that feels fresh and contemporary."

Such upgrades are probably overdue. "I don't think that Holiday Inn has much of a choice," says David Brudney of David Brudney & Associates, a hospitality marketing consultant based in Carlsbad, Calif. "It's an icon in this industry, so it will always have a certain power in its brand. But in the last five years, so much in the industry has changed. Luxury is now mainstream. Everyone is putting marble in the bathrooms and upgrading the front desk."

The competitive pressure is greatest, he says, on its Holiday Inn full-service brand. "Holiday Inn Express will do fine, but it's that middle-tier property that needs all the help in the world."

Going forward, he says, the brands that will thrive are those that cater to the lifestyles of younger travelers, "who are very demanding, highly technology-oriented travelers," Brudney says. "They're not going to be driving up in their fathers' Oldsmobiles."

The move shows that "IHG is managing its brand for the future, responding to customers' involvement," agrees Priscilla Bevel Caldwell, a spokesperson for Madigan Pratt & Associates, a hospitality marketing consultant in Williamsburg, Va. "Better delivering on guests' expectations is a critical aspect of fulfilling the brand promise."

IHG says it will launch new advertising to support the rebranding as soon as the majority of the Holiday Inn properties are in compliance with the new identity and standards, the spokesperson says, which will likely be mid-2009.