Holiday Inns are remaking themselves

Since Day One, says Terese Roseau, a banker from St. Johns, Antigua, she has felt a special connection with the staff at Philadelphia's Holiday Inn Express Midtown hotel.

So much so that when Roseau is here every three months for ongoing medical treatment at nearby Thomas Jefferson University Hospital, she won't stay anywhere else.

"They're excellent. From the front office to the kitchen, I know them all by their first names," said Roseau, 43, as she sat scrolling through messages on her laptop recently in a hotel room equipped with all-new carpeting, furniture, bedding, drapes, and a flat-screen HDTV.

Establishing that kind of rapport with the customer is being emphasized at every Holiday Inn and Holiday Inn Express hotel as part of a global brand relaunching by the parent company, InterContinental Hotels Group (IHG), the world's largest hotel firm.

As companies nationwide slash their travel budgets, Holiday Inn is pushing hard to capture a larger share of the corporate market from more expensive and upscale rivals such as the Hiltons, the Sheratons, and the Marriotts.

"Nobody ever gets fired for staying at Holiday Inn," said Kevin Kowalski, senior vice president of global brand management for the chain. "There is no preconceived notion of extravagance attached to our brand."

Across the globe, Holiday Inn hotels have been decluttering their lobbies, installing new carpeting, signs and lighting, revamping rooms, and retraining employees.

The effort started in April 2008 and is set to conclude at the end of this year. It is the largest relaunch ever undertaken in the hotel industry, experts say, based on the total number of rooms involved (427,102 worldwide) and total cost ($1 billion), which is being financed mostly by the individual hotel owners.

Holiday Inn has eight hotels in the Philadelphia region. Four have completed their relaunch, including the 168-room Express Midtown at 1305 Walnut St., with work at the others still under way.

"They did a customer survey, and customers told them they liked the Holiday Inn brand, but the look was getting a little dated," said C. Patrick Scholes, senior lodging analyst at FBR Capital Markets Corp. in Arlington, Va.

The relaunch eliminates another problem.

Customers "know if they visit a Holiday Inn in Philadelphia or one in Baltimore, they are going to get a consistent quality product because the parent company imposed quality standards across the board," Scholes said. "That is why they did it - there was a lot of inconsistency in the brand."

As of mid-January, 1,775 of the 3,300 Holiday Inns worldwide had been relaunched, at a time when most companies are shying away from big-ticket projects. InterContinental Hotels announced the initiative in October 2007, before the economy went sour.

"In many ways, it's almost better," Kowalski said. "It is paying off with a return on investment in an economic downturn. We are gaining momentum."

Relaunched Holiday Inn hotels are, on average, showing gains in revenue per available room of 3 percent to 7 percent, he said, and improved market share of 2 percent to 6 percent.

Changes focus on four components: first impression (a sense of arrival at check-in); the experience; the room, and the service.

To be eligible for the relaunch - and the brand's new logos - each Holiday Inn and Holiday Inn Express (the former comes with a full-service restaurant, the latter does not) must accumulate sufficient points on a customer-service score and pass a quality inspection. Every employee must undergo "Stay Real" training.

Inns that can't meet the requirements are eventually forced out of the InterContinental Hotel system.

At the Holiday Inn Express Midtown, Haverford Hotel Partners, the owner, paid for the $1.5 million relaunch that ended last fall.

"We emphasize customer service," general manager Jo Ann Bongart said. "When they're here, we want to make [guests] feel as if they were home."

Because of that, she said, the hotel has a lot of regulars.

Last week, Bongart routinely asked guests in the hallways and the lobby, "How's your stay here?"

Industry analysts say it's no coincidence that hotel brands are pushing customer service these days. The struggling economy has resulted in across-the-board price-cutting, and every hotel is fighting for new customers and to keep their best ones.

Nationwide last week, revenue per available room and average daily rate for the midscale and economy hotel segment, which includes Holiday Inn, were down 9.8 percent and 6.4 percent, respectively, according to Smith Travel Research.

IHG, whose portfolio also includes high-end Intercontinental Hotels & Resorts and value-oriented Candlewood Suites, has been feeling the pressure. Revenue for the third quarter ending Sept. 30 was $401 million, down from $496 million from the previous year.

"We are taking action to improve our operating efficiency and support the performance of our hotels," company CEO Andrew Cosslett said during a November conference call on third-quarter earnings. Fourth-quarter earnings will be released Feb. 16.

In addition to smaller corporations, Holiday Inn targets individual business travelers like Boyd R. Rorabaugh, a college professor from Ada, Ohio, who are closely watching their expenses on the road.

"I was recommended to stay here by the company I came to visit, Thomas Jefferson University Hospital, because of the proximity," Rorabaugh, 36, said, after he checked out of the Holiday Inn Express Midtown and waited for his ride to Philadelphia International Airport.

Rorabaugh said he paid $119 a night - a special midweek rate - during his four-night stay, plus tax. He appreciated one perk in particular: the expanded breakfast bar, where guests can get a complimentary hot meal.

"I have no complaints," he said.