Holiday Inn: Globalizing in the European Market

By taking advantage of economies and technological advances, businesses operating in the hospitality industry have the opportunity to globally expand and participate in world markets.  It is observed specifically in hotels such as Holiday Inn. In 1951, founder, Kemmons Wilson built one motor lodge along a highway interstate that was comfortable and convenient. Within ten years he became one of America’s first hotel chains that stretched internationally.  The first hotel appeared in Montreal Canada in 1960. He then moved across continents to Europe, Asia, and finally South America in 1974, (Gee, 2008). Early on, Wilson set an example for future establishments by completing many first for the industry. He found something that worked and included these strategies into his establishments. Weather people were traveling across the country or across the world, Wilson ensured that Holiday Inn is not only accommodating but accessible throughout the globe.

Wilson was not the only person to take advantage of global tourism. It was observed early on by President Franklin Roosevelt. He introduced this idea, encouraging US corporations such as hotel chains to “seek business abroad … as a means of improving the economic performance of different nations through increased tourism and foreign exchange earnings”, (Gee, 2008). This was encouraged due to the various benefits it has for participating countries. It can improve infrastructure, tourism, and stimulate modern technology to underdeveloped lands. This happened in Europe after WWII as an attempt to rebuild. Today, marketing is much different in the time Wilson built his first motel. All he had to do was make the right accommodations at the right location. As a result, large cities and capitals around Europe such as Rome and Paris are saturated with hotels, motels, and lodging. In an attempt to maintain an advantage over competitors, Holiday Inn markets through various avenues. Advertisements can be found on the television and radio station specifically Germany and London. These ads are geared towards the smart and economic traveler. This is expressed as they “plan to overhaul the positioning of its midrange novotel brand, because the mid-market is ‘losing its identity’, as consumers have come to expect mid-scale quality even at budget prices”, (Eleftheriou-Smith, 2012). It is a marketing strategy used not only in Europe but in Asia as well. By stressing comfortable accommodations at affordable prices, they attempt to reestablish themselves as a low budget facility offering standard amenities.

There are various competitors throughout Europe that Holiday Inn compete against. These include Club Mediterranean (Club Med), Accor, and Le Meridien. These are hospitality establishments that created chains across Europe and other parts of the world. However, business mergers and acquisitions often alter the playing field. For Holiday Inn, this started in 1989 when they sold their brand to Bass PLC, (Gee, 2008). Years later Bass Hotels and Resorts became part of Six Continents Hotels. It includes Holiday Inn, Holiday Inn Express, Holiday Inn Select, Holiday Inn Family Suites, Holiday Inn Garden Court, and others, (Chon, Pin, Terry, & Zhang, 2009). Recently, other agents have acquired Holiday Inn Express Hotel such as, Fattal Hotel Management Ltd. In 2013, Fattal bought as many as 20 Holiday Inn’s throughout Germany, becoming a strong competitor in hospitality throughout the region.

Although outside companies have bought and acquired the Holiday Inn brand, it is a method used by professionals in the industry as a form of a strategic alliance. This is observed through the partners of Holiday Inn. Currently, Holiday Inn is partnered with IHG, InterContinental Hotels Group. Not only is IGH aligned with Holiday Inn but also Intercontenintal Hotels and Resorts, Crowne Plaza, Hotel Indigo, Staybridge Suites, and Candlewood Suites. With this union, IHG represents one of the largest hotel groups in the world. Other partnerships are observed in Holiday Inn as they developed an alliance with Scandic. This is a small chain of hotels found throughout Scandonavia. It provides a unique advantage for both parties. Holiday Inn gets to strengthen their branding in the region all the while Scandic Hotels benefit through profit. In this way, “both companies secure a stronger position in European markets, with improved competitiveness and a greater potential for profitability”, (Yu, 1999). It can also improve profits and revenue through differences in labor costs, supplies, and exchange rates. As a result, participating in the global economy presents the ability to ensure business continuity and a competitive advantage.

Globalization provides a unique opportunity for different enterprises to capitalize off different market economies. It could cost millions to build a nice and convenient Holiday Inn off New York’s Time Square. However today it would be difficult to find available property in the area, let alone stomach property cost that does not include revamping or reconstruction. Instead, businesses consider the new alternative. This is to take the industry across the world to places not yet popular tourist destinations for Americans. This includes areas such as Singapore and Scandinavia. In these areas, cities have room for growth, building, and branding. The property is cheap, including the labor cost, material, and resources to build and maintain a Holiday Inn. In addition to this, it can attract interest to additional business travelers and cliental. This can be comfortable for some. When going to a foreign land, many find comfort in what is familiar. With the Holiday Inn brand found across the world, travelers can find relief in knowing that they do not have to worry about what to expect or go through the frustration of language barriers or differences is reservations and scheduling. “Because of these strategic advantages… it [has] become a market entry choice and global strategic development”, (Yu, 2009).

 

References

Chon, K., Pine, R., Terry, A., & Zhang, H. (2009).Tourism and hotel development in china: From political to economic success. New York, NY : Haworth Hospitality Press. Retrieved from http://books.google.com/books?id=2K-KGm8qGcQC&pg=PT24&lpg=PT24&dq=holiday inn mergers and acquisitions list&source=bl&ots=JdPxMH9oIP&sig=sw2Qk7D4DCcXg1BIHQZIVhYU9ic&hl=en&sa=X&ei=jxX4UpmsAcaskAeB5IHABQ&ved=0CHgQ6AEwBg

Eleftheriou-Smith, L. (2012, October 11). Intercontinental hotels group’s matt luscombe on his post olympics strategy. Marketing Magazine, Retrieved from http://www.marketingmagazine.co.uk/article/1153770/intercontinental-hotels-groups-matt-luscombe-post-olympics-strategy

Gee, C. (2008). international hotels: Development and management. (2nd ed.). New York, NY: American Hotel & Lodging Association.

Shauly, A. (2013, Feburary 02). Fattal buys 20 german holiday inns for nis 1.5b. Globes: Israel’s  Business arena, Retrieved from http://www.globes.co.il/en/article-1000826000

Yu, L. (1999). The international hopitality business: Management and operations. Binghamton, NY: The Haworth Hospitality Press. Retrieved from http://books.google.com/books?id=vtvX0TiRag4C&pg=PA147&lpg=PA147&dq=holiday inn strategic alliance&source=bl&ots=InuZO6mEdH&sig=_vLIYJoyBon4gtKtF8fbtmKzXfY&hl=en&sa=X&ei=zxb4UrPfJI7qkQew5oCoDA&ved=0CDYQ6AEwAA

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About Russia Robinson

I am an independent freelance writer and free thinker. I strive to use my writing talents to benefit the greater good of society, one word, one sentence, one page at a time. Originally from Richmond, California I attended San Francisco State University receiving a BA in English Creative Writing and American Literature in 2004. After this I attended post graduate studies in 2008 at Georgia’s Kennesaw State University in Technical Writing. With an academic background in English, I have spent more than 10 years’ helping young people succeed. This can be seen in my career background in education and mental health. I am a certifiable Language Arts teacher for the state of Georgia. I also worked in social services including juvenile mental health treatment services and counseling. As a result, I understand the diversity of problems people face in their everyday lives. With words put together like so, I promote equality and a healthy society for all people regardless of individual differences. Conducting research, writing articles, essays, and blogging, I push to educate others about various issues that affect people. I also do this creatively through short stories, poems, pictures, and a novel in progress. My hobbies and interest are reading and learning. I enjoy all things art and all things nature. From camping and astronomy to photography and cooking, I enjoy sighting seeing and socializing just as much as I enjoy curling in bed with a good book or binge watching TV.
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