InterContinental Hotel Group’s relaunch of the Holiday Inn brand with a new logo a year and a half ago, now seems like a pretty savvy move. As more consumers trade down on vacations this year, the chain, which emphasizes a low-cost yet wholesome family experience, is well positioned. That, at least, is what analysts who follow the chain say. The chain’s CMO, Tom Seddon, who returned to Holiday Inn in 2007 after a sojourn as CEO of the Subway Franchisee Advertising Trust Fund, said he’s holding his breath to see how this summer will pan out. But he is cautiously optimistic about Holiday Inn’s chances. To reach those travelers, Seddon is banking on a heavy online presence and a focus on one-to-one communication. Seddon spoke recently with Brandweek editor Todd Wasserman. Some excerpts are below:


Brandweek: Obviously in this economy it seems like people are traveling less or at least they’re traveling differently. What does that mean for Holiday Inn?
Tom Seddon: People are traveling less, but they are also traveling differently. I think there’s a stronger desire for real value and less interest perhaps in some of the fripperies. So you certainly see the worst hit in the travel industry is the high luxury end where in the mid-market we actually offer some of the same travel services you need but without the unnecessary pieces. So that puts Holiday Inn in a very strong position.

BW: Is it the case that people who formerly would have done vacations that required air travel are now hitting the road instead or are there other factors? What other dynamics are at work?
TS: It’s a bit too early to tell on the vacation front. The impact of the credit crunch really happened in the last quarter of last year. So we won’t really start to see until the spring break and the summer what’s going on. But we’re starting to see on the business front people taking shorter trips, combining trips and we are seeing that the drive market is more resilient than the fly market.

BW: How do you reach someone who’s in the vacation planning frame of mind?
TS: Well, most of our marketing activity is non-traditional. It’s largely about having a relationship with people through a loyalty program—we have the biggest one in the world with 42 million members—as well as using quite a lot of our focus on the Web to talk to people who really are in vacation-planning mode. So that’s really where you’ll see a lot of our activity occurring which maybe isn’t that visible on a mass basis, but is enormous on a one-to-one basis.

BW: Does that mean your focus has shifted from customer retention rather than customer acqusition?
TS: No, not at all. Both are important and right now actually we think there’s a big opportunity in customer acquisition. Outside of the leisure side—leisure is less than half of our business—on the corporate side we have a huge focus on customer acquisitions because many companies are more and more interested in getting their customers out of up-market hotels and more into mid-market and nobody ever got fired for staying in a Holiday Inn.

BW: Do you have use for traditional media? Do you do much TV and print?
TS: We do. It’s part of a mix and it’s not unimportant it’s just that by far the majority of our money goes into things that don’t have the same visibility. There’s a lot of money going in there, you just don’t see it the same way.

BW: What do you mean, where does it go?
TS: A lot goes into one-to-one in our loyalty program, which is all about individual communication. A lot in the Web, finding ways to talk to people at the point that they are thinking about traveling, rather than trying to reach them when they’re sitting on their couch at home.



BW: What’s the usual time frame between when someone starts thinking of vacation and when they do it?
TS: Even on the vacation side, in the main hotel business, people still book on average about three weeks out. It’s still a surprisingly short time for most people.

BW: What are the biggest changes you’ve made since you returned to the company in 2007?
TS: We’re worked really hard to focus our spending on fewer bigger things.

BW: What is the biggest misconception about the Holiday Inn brand?
TS: People’s who’s only experience of travel is ‘I fly to some luxury hotel in a big city’ and they think of a Holiday Inn person as a real down market, $30,000 household income consumer, but the average income of a Holiday Inn consumer is about $80,000, quite the average.

BW: What do you think is the toughest part about being a CMO?
TS: I think balancing all the choices of what you could do and crafting something that’s coherent. There are so many things you could do, the danger is you just try to do a little of everything. It’s much harder to concentrate on a few little things.