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Being a Holiday Inn is No Holiday, at Least for 300 Owners Right Now

By GEOFF WILLIAMS, AOL SMALL BUSINESS
Posted: 2009-11-16 14:12:43
Holiday Inn
Holiday Inn
It looks so easy to own a franchise -- someone else comes up with the winning formula. To succeed, you simply have to connect the dots and do what the manual tells you. Of course, as anyone who owns a franchise will tell you, there's a little more to it than that, and sometimes following the formula isn't so easy. Case in point -- right now, 300 Holiday Inns are in danger of losing their franchise license.

This was made clear at a recent InterContinental Hotels Group convention when Holiday Inn brand chief Kevin Kowalski told the audience of approximately 2,000 hotel franchises that most of the 3,300 Holiday Inn hotels around the world have completed upgrades or committed to making mandated changes by or before the deadline of February 1, 2010. However, 12 percent of the Holiday Inn hotels -- about 300 -- haven't. And those who don't will lose their franchise license, no exceptions. According to USA Today, Kowalski told the assembly before him: "If you're in the minority 12 percent that haven't committed yet, step up and do it. If you have a quality problem, fix it. We're not changing timing." He added, "On the compliance date, February 1, those hotels will get a failure letter and so will their banks."

Why haven't 300 upgraded? Money, obviously. To continue operating as a Holiday Inn, the franchise owners have to buy new bedding, pillows and towels and renovate their lobby. They also have to pipe in hip, modern music from an approved playlist, put in green uplighting on the exterior and making a smattering of other improvements. The Wall Street Journal reports that the cost of revamping each hotel -- which the franchise owner has to pay for, and not IHG -- will be between $150,000 and $250,000.

It's brutal, but I think anyone can see the logic here. If you want your brand to be synonymous with modernity and quality, you have to demand certain things from your franchise owners, and having worked at a hotel during my college years, I picked up a whiff of what can happen when you let your brand go downhill. I worked at a Days Inn. It was a nice enough hotel, and the people I worked with were good and hardworking, but there was a dingy quality to the place; I couldn't imagine wanting to be a guest at this particular Days Inn. There was always a sense that the hotel had seen better days, and sure enough, a couple years after I left, I drove by, and it was no longer a Days Inn. In the subsequent 17 years that have followed, I believe the hotel has changed names two or three times.

Not that I'm unsympathetic to the plights of these individual hotel owners who are at risk of losing their Holiday Inn license. From what the WSJ reports, some of them are reluctant to pile on more debt to their business, and others haven't yet been able to come up with the financing. Lending is tight right now, and a few mortgage bankers haven't received Holiday Inn's memo. Unfortunately that's the way it goes in the hotel franchise industry -- sometimes, just like a wayward traveler, you're left out in the cold, locked out, and looking for a new place to stay.

2009-11-16 11:51:36
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jddeva 08:20:49 PM Nov 17 2009

I always stay at Holiday inn express. Holiday inn express will deliver best value for you money.

ccgifts3 02:43:12 AM Nov 17 2009

Common sense tells you Holiday Inns should be helping their owners not fining them for lack of customers, This is a depression we are in. What happened to helping each other in America. That is what is wrong with the entire country.

ccgifts3 02:41:26 AM Nov 17 2009

Its a depression. Holiday Inn needs to use some common sense and help their motels not fine them. That is what is wrong with the entire country, No one helps each other anylonger.

texassoap 02:33:11 AM Nov 17 2009

We stayed for over a week at the New Holiday Inn in Temple, TX. It was new and very, very, nice and clean. The staff was very helpful and the restaurant was great, except a little pricey. Each night I had to call about 11 o'clock and ask them to turn down the pool music because it was too loud for us to sleep. They complied. The next time we stayed was about six months later and one night we heard water running in the wall and called the desk clerk up to listen. He said someone was just taking a bath in the floors above it and it wasn't a broken pipe. Never gave it a thought as to where the water pipes were located!!I can imagine the way the economy is now, it's tough to make a profit in any business. People are hurting bad, people who never had a problem with money before.

texassoap 02:30:35 AM Nov 17 2009

We stayed for over a week at the New Holiday Inn in Temple, TX. last year It was new and very, very, nice and clean. The staff was very helpful and the restaurant was great, except a little pricey. Each night I had to call about 11 o'clock and ask them to turn down the pool music because it was too loud for us to sleep. They complied. The next time we stayed was about six months later and one night we heard water running in the wall and called the desk clerk up to listen. He said someone was just taking a bath in the floors above us and it wasn't a broken pipe. Never gave it a thought as to where the water pipes were located!!I can imagine the way the economy is now, it's tough to make a profit in any business. People are hurting bad, people who never had a problem with money before.

cherokeeonly 02:14:42 AM Nov 17 2009

Never stay at a La Quinta Inn.. the pitts!

aangelleyesblu 01:43:41 AM Nov 17 2009

See this is a big problem with our USA owned hotels now. You have India coming over here and controlling the Days Inns, Super 8's, and most of the lowest rated hotels, SAD that the American people would give into this, because the "IIndia" owned hotels have roaches that you take home in your luggage, sand paper towels and washclothes, poor breakfast (if any at all) The ONLY hotel CHAIN that I 95% trust is the LaQuinta's. Most are being newly renovated with sweet hip rooms, with every admentity you can get. PLUS GET THIS MOST OF THEM ALLOW PETS FOR FREE,,,,,,THIS PLACE IS THE BEST IN MY BOOK. Well 95% of them anyway, the rest of the are slowly following suit. I myself pretty much insist on staying in an American owned hotel, I don't want my going going to India!!!! Period!!!!

drpiglet5 01:23:38 AM Nov 17 2009

I currently work for a Holiday Inn slated for relaunch, and was formerly with the Hilton brand. Someone mentioned Hampton Inn- less than five years ago Hamptons were inconsistent, and the quality of the hotel and the service received could vary by location. Hilton went though all of their brands and began standardizing them- now a Hilton is a Hilton, an Embassy Suites is an Embassy Suites, etc- no matter where you go, you know what you are getting. Many of the brands saw reputation suffer through franchising, and finally had to crack down and set the new standards all the way down to the thread count in the sheets. HI is a bit behind the curve (in a lot more ways than I care to go into, having come from the Hilton side), but this action is overdue and in many cases is the only way to force franchisers into ponying up some much needed capital for their properties. Yes, the timing is bad, but waiting for something to break down even further solves nothing.And rest assured, jhorton,

aangelleyesblu 01:19:56 AM Nov 17 2009

Let Jeff Burton the driver for Nascar Racing which Holiday Inn sponcers, let him donate his winnings to help out!!!?? Only seems fair, they sponcer him ....he gives back??

camelottwo 12:01:00 AM Nov 17 2009

Holiday Inns used to totally gross me out and have made a concerted effort to upgrade their locations. As a former Regional Director of a company that franchised, I totally understand why the corporation is insisting on this. Maybe the franchisees are in over their heads already and need to get out now. It'll save them in the long run. If they cannot afford to properly upgrade or maintain, then they need to establish appropriate lines of financing to ride the storm. Come on, doesn't a decent hotel NEED to budget it replacement of bedding pillows blankets etc...............come on!These are the inevitable % of loser franchises in the system. Let them cut loose now rather than pull down the rest of the brand.

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