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A number of Holiday Inn franchisees either can't afford or are unwilling to make changes.
For Doug Schubert, who has operated a Holiday Inn on the banks of the Fox River here for 34 years, the end will come Dec. 31. The next day, his 146-room hotel will begin operating under Choice Hotels International Inc.'s Clarion brand. He would have liked to stay with Holiday Inn, he says, but he couldn't afford the renovations and upgrades that were demanded by the unit of U.K.-based InterContinental Hotels Group PLC, which he estimated would cost $1.6 million. Doug Schubert has operated the Holiday Inn in downtown Green Bay, Wisc., since 1976."I had to make a choice of going independent, going bankrupt or operating with a [brand] that is more reasonable as far as fees and costs," Mr. Schubert says. "My first desire is to sell, but the buyers aren't out there." Holiday Inn said it couldn't comment on Mr. Schubert's situation. Reports the WSJ
A number of these hotels need to be improved. I can't fault the Franchisor
But the hotel looks dated. Its wallpaper has separated slightly at the seams, and its halls show stains and scuffs. It also still provides guests with 25-inch projection-tube TVs rather than newer flat-panel models. Specifically, Holiday Inn demanded that Mr. Schubert stucco the hotel's concrete exterior and replace the furniture, carpet, bathroom tile, wallpaper and TV sets. It also wanted the hotel's restaurant and lobby redecorated. "Their emphasis is on comfortable beds and clean, modern bathrooms," he says.
Some franchisees have decided to remain on board
Meanwhile, as hotels like Mr. Schubert's switch brands, a few owners of older hotels have stayed with Holiday Inn. Don Houseworth, who has owned a 156-room Holiday Inn in Blytheville, Ark., for 34 years, says that his hotel has benefited from the chain's upgrades, which he completed in 2008. Since then, he says, the hotel has posted an occupancy gain of 11 percentage points to the mid 60s and a $7 gain in its room rate to $87. Bryan Nearn, who has owned a 111 room Holiday Inn in Asheville, N.C., for 25 years, says upgrading his hotel helped soften the blow of the recession. He says he likes the new bedding and external signs, but not the new exterior lighting or lobby scents.
About the Author: Ed Teixeira has over 35 years of franchise industry experience as a franchise executive and franchisee. He has served as a franchise executive in the c-store, manufacturing and home healthcare industries and has licensed franchises in Asia, Europe and South America. Ed operates FranchiseKnowHow which provides information and advice to prospective and existing franchisees and franchisors. He publishes newsletters for the franchise community.