The Holiday Inn logo, which adorns more than 3,000 hotels around the globe, is to be changed for the first time since it was launched in 1952.

InterContinental Hotels Group (IHG), which owns the ubiquitous chain, is spending up to £30 million kickstarting the changeover to the new signage.

That investment, which will be treated as an exceptional item in IHG's results, includes the cost of commissioning the new design from Interbrand, the consultancy, although the company is refusing to split out the actual amount.

However, the cost to its its army of Holiday Inn franchisees will be rather higher. They will face an estimated bill of $1 billion implementing the new look by the end of 2010.

Opinions are likely to be divided over the merits of the garish new green logo compared with the retro 1950s script that will forever be associated with Kemmons Wilson, who opened the first Holiday Inn in Memphis in 1952.

But Andy Cosslett, IHG’s chief executive, claimed that indepth market research conducted among Holiday Inn customers had also found strong acceptance for what he called a "a refreshed and contemporary brand image".

“Our research is clear, people like it. You don’t want to alienate loyal users so the trick is to find a way of keeping the familiarity while making it fresh and relevant.”

He added: “Signage is very important. We’ve worked out that over 100 million people see our sign every day. It’s a very important part of the marekting of the brand.”

But Mr Cosslett said that the $1 billion investment by franchisees would cover more than just new signage. The company has also drafted new brand standards that will see all bedding replaced and things like lighting and showers improved.

“It’s more than just about the signage. The sign signals much wider changes,” he said.

He revealed that a “scent and music strategy” had also been developed for the chain to enhance the customer experience.

“We’re creating a Holiday Inn scent. It’s be very subliminal. You’re not going to walk in and find it hits you between the eyes. It’ll be very subtle.”

One of the changes will remove the anomaly whereby the chain's budget brand is called Holiday Inn Express in America and Express by Holiday Inn elsewhere. All will now become Holiday Inn Express.

Asked about the reaction from franchisees, he replied: “They vary in terms of their receptiveness. But we think there’s a tangible economic return to the owners from this - there needs to be.”

He said that the brand was currently enjoying “real momentum”, with 1,000 new properties in the pipeline. Many of these are being built to a recently introduced prototype design. There are currently 25 prototype Holiday Inns and 200 more in the pipeline.

One analsyt said: “The new logo is pretty awful. I expected Kemmons Wilson will be turning in his grave.”

But Mr Cosslett insisted that Mr Wilson’s family “absolutely love it”, and the new logo would be used on a new Holiday Inn to be built in Memphis along with a small Holiday Inn museum.

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