Holiday Inn revamp to boost revenues by up to 7 pct

LONDON, April 8 (Reuters) - The world's largest hotelier, InterContinental Hotels Group (IHG.L: Quote, Profile, Research), expects revenues at its biggest brand, Holiday Inn, to be boosted by up to 7 percent as a result of its three-year $1 billion brand relaunch.

The British-based hotel group is kicking off the revamp of its 3,000-plus Holiday Inns with a new logo and a range of improvements at the 56-year old chain and is looking to its hotel franchisee owners to foot most of the bill.

The hotelier, which also owns the InterContinental and Crowne Plaza brands, announced the revamp last October saying it is spending 30 million pounds ($60 million) supporting the relaunch, compared to the franchisees' bill of $1 billion.

The investment for franchisees of up to 1,000 pounds a room is expected to lift their revenue per available room (RevPar), a key industry measure that accounts for room rate and occupancy levels, by between 3 and 7 percent, the hotelier estimates.

"So far we are confident we can reach this target and anecdotal evidence is very positive," said InterContinental Chief Executive Andrew Cosslett at a briefing on Tuesday after meeting with Holiday Inn franchisees from its Europe, Middle East and Africa (EMEA) region.

The group has over 500 of its Holiday Inns in this region. It has earmarked 30 Holiday Inns as pilots for the revamp, and 16 of the 19 scheduled for the United States have reopened, while the first two of the 11 planned in its EMEA region have opened over the last week in the south-east of England.

Cosslett said it is too early to seen any uptick in trade with the first U.S. re-opening only in February and most in March, but he says the group has seen a good level of signings.

"The signup process has been great and you can count on one or two hands those that have refused," Cosslett said.

He argued that the $1 billion price tag was not too onerous even in the current climate of tighter credit conditions, and added that branded hotels tended to perform better than unbranded ones in times of an economic slowdown.