Holiday Inn, part of InterContinental Hotels, has signed up as the official hotel sponsor of the London 2012 Olympics.

The deal, which will cost the company about £10 million, comes as the hotel brand is midway through a £600 million three-year global relaunch.

Holiday Inn, which has 42 hotels in London, will assist the Olympics organisers with accommodation and logistics both during and in the run-up to the Games.

The company is the ninth to sign up as a domestic “tier three” sponsor — the lowest level of support under which a backer is able to use the Olympic logo in their advertising.

There are seven domestic “tier one” sponsors, including BP, British Airways, BT and Lloyds TSB.

The Holiday Inn deal comes when recession has prompted many companies to rein in sports sponsorship and other forms of discretionary marketing spend.

The London Organising Committee of the Olympic Games and Paralympic Games has so far raised almost £500 million from sponsorship out of its £650 million to £700 million target.

InterContinental Hotels, the world’s largest hotel group by the number of rooms, also owns the Crowne Plaza and Hotel Indigo chains.

Last month it reported that revenue per available room — its sector’s most closely watched measure of financial performance — fell 13.6 per cent in the first quarter of 2009. Operating profits from continuing operations fell by 44 per cent.

Shares in the FTSE 100 company, valued at £1.9 billion, have fallen 22 per cent on the year.

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