Room at the Holiday Inn: How an American icon was reinvented for the 21st century

Memphis is famous for blues, Elvis ... and hotels. Twice a day (at 11am and 5pm) a parade of live ducks troops through the lobby of the historic Peabody Hotel in the city centre for the amusement of its guests. More sombrely, Dr Martin Luther King Jr was assassinated on a balcony of the city's Lorraine Motel in 1968. And on the first day of August in 1952, a middle-aged man named Kemmons Wilson created the first hotel of a chain that would come to define standardised sleep the world over: Holiday Inn.

By 1958 there were 50 of them throughout the US. By 1964 there were 500, and the 1,000th Holiday in opened in 1968, in San Antonio Texas. But by 1971, the gloss had come off this American icon. Another soon-to-be global brand, Elton John, was complaining in song that "You ain't seen nothing till you've been/In a motel, baby, like the Holiday Inn", and bemoaning blandness and underwhelming service.

Two years later that first Holiday Inn, at 4941 Summer Avenue, closed. It had been positioned on one of the main roads into town but new highways were taking potential customers elsewhere – and after all this was, and still is, a brand that caters to the era of mass travel. Today, all that remains to indicate that a piece of travel history was born there is a green historical marker adjoining the Wholesale Imports parking lot. This solitary sign proudly celebrates "a nationwide chain of inns, each marked by a giant green and yellow sign topped by a star".

The so-called "Great Sign", part of US road-movie legend, has undergone its own rebranding over the years, morphing into a thoroughly modern – but rather more corporate – green and white logo. The hotels, too, have changed from being a family-owned enterprise to forming part of a huge multinational franchise operation. But now a reborn version of Holiday Inn has opened a few miles from that Wholesale Imports lot.

The bright, spacious lobby of the Holiday Inn Memphis Wolfchase Galleria is hung with striking black-and-white photographs; a door to the left leads to an indoor pool area with a retractable glass roof. The décor of the generously sized bedrooms emphasises clean lines. It's all intended to convey the idea of a sleek yet friendly operation – the aim being to set a new standard for Holiday Inn's 3,300-plus hotels across 100 countries: the largest relaunch the hospitality industry has ever seen.

British-owned Holiday Inn may not quite be the world's largest hotel chain (Best Western International boasts 4,000-plus establishments), but the revamp is still costing £600m. Yet behind the new signage and corporate talk is an appealing story of rags to riches, of modesty despite millionaire success and latterly of a touchingly personal sense of reprieve. Which is why I had come to Memphis.

Like most second-division US cities, Memphis is a wide-ranging sprawl – from its Downtown core, where blues and rock 'n' roll were born, to its residential Midtown and its affluent and ever-expanding eastern suburbs. The Wolfchase Galleria is located just off the Interstate highway 40, close to a mall the size of an English village and a good 20 miles from the main tourist area of Beale Street. The building opened on 1 August last year, 57 years to the day since the very first Holiday Inn started business. It was constructed as a showpiece Holiday Inn by McLean Wilson, the grandson of the founder, Kemmons Wilson.

The Wilson family have had an on-off-on relationship with the chain they created. When Kemmons Wilson headed up the multinational giant, he insisted for some time on being paid a salary of just $1 a year. He had stock in the company, quite enough money and no desire to lead a jet-set life. He retired in 1979.

By the time he died, aged 90, in 2003, the brand was in the British hands of the InterContinental Hotel Group (now based just off the UK version of an Interstate, close to the M25 in Denham, Buckinghamshire). But the Wilson family had become disillusioned: although some hotels were very serviceable, they found the general lack of standards disheartening and they distanced themselves from the organisation. Then in 2007 they were approached about Holiday Inn's relaunch. What did they think of the rebranding plans? Did they approve?

Yes, in fact, they did. So they decided to buy into the franchise again and build a new Holiday Inn in Memphis. I met McLean Wilson and his father, the founder's third son, Kemmons Wilson Jr, in their new lobby. Here a recreation of Holiday Inn's first room set is displayed behind glass – and in a subtle twist, the 50s furniture inside is echoed in the retro-style chairs of the hotel's 133 bedrooms. We paused to look at some of the 80 or so photographs on the ground floor: the five young Wilson children cutting the opening ribbon of the first-ever Holiday Inn in 1952; Kemmons Sr with Gerald Ford, with Ronald Reagan, with George Bush Sr, with George Bush Jr and more. And as we progressed around the building a story emerged of how Kemmons Wilson Sr changed the face of the US with his value-oriented hotels – and how the brand became an American icon.

Wilson grew up in poverty in 1920s Memphis – and became the personification of the American dream writ large. Aged 17 he became an entrepreneur, first selling popcorn, then pinball machines, then Wurlitzer organs. After the Second World War he made his fortune in construction. Given the great need for family housing in boom-time America, Kemmons Jr explained, it was a very good time to be in the business.

In 1951, Kemmons Wilson took a road trip to Washington with his wife and five young children. He was appalled at the standard of motels they stayed in along the way. So he vowed to create a family-friendly chain of reliable accommodation across the States. "When he said he'd build 400 hotels, my mother laughed," said Kemmons Jr. "And that's largely what made him determined to do it."

The hotels were to have air conditioning and a television in every room as well as providing free accommodation for children sharing their parents' room and offering other family facilities, from ice-making machines to a swimming pool and a restaurant. "Of course much of this is standard now," McLean commented, "but it was revolutionary then."

Kemmons Snr opened his first hotel in Memphis a year later. It was called Holiday Inn because the draughtsman had doodled on the design the name of the 1942 movie Holiday Inn starring Bing Crosby and Fred Astaire (the one in which Crosby croons "White Christmas"). Back then there were no problems with licensing, though it hasn't all been plain sailing in branding terms: a hotel on the Canadian side of Niagara Falls called the Holiday Inn kept the chain out of the tourist town for 20 years, and retained the holidayinn.com brand for a decade (obliging the chain to use holiday-inn.com).

Several decades before the internet was invented, Kemmons Sr built four Holiday Inns and then ran out of funding. But according to Kemmons Jr, "he was still determined to complete 400 hotels". So he began a franchise business. He sold Holiday Inn's branding to other hoteliers who would then set up their own hotels under Wilson's signage and with his marketing. Crucially, they had to have all the requisite features (among themV C air conditioning and a swimming pool) and maintain a required standard.

Franchising is now a widespread business model in the US, but this was a pioneering move in the 1950s. While Holiday Inn was spreading standardised accommodation across the US, a salesman named Ray Kroc was doing the same with a burger franchise he had bought from a couple of Californians, the McDonald brothers. Kemmons Jr recalled how Kroc paid a visit to Memphis to learn from his father.

During the 1960s, growth was reflected with the change of marketing slogans from "The Nation's Innkeeper" to "The World's Innkeeper". In 1965, the firm teamed up with IBM to offer the world's first computerised hotel reservations system (and, 30 years later, became the first chain to take bookings on the internet).

McLean Wilson describes his grandfather as a "serial entrepreneur". He had a vast number of other interests, from a radio station he owned with Sam Phillips, the man who first signed up Elvis Presley, to the funeral business that buried Elvis in 1977.

Today the US operations of Holiday Inn are masterminded from Atlanta, Georgia (a city that has no fewer than 43 Holiday Inns to choose from – with 10 more due to open this year). I stopped off there to talk Kevin Kowalski, the man behind Holiday Inn's new look. The aim, he said, is to provide consistent good value. "There are no fancy bells and whistles: this is the basic hotel experience done well." The rebranding, added Kowalski, is essentially about providing a cleaner, fresher image by concentrating on detail.

First impressions are enormously important, it seems. "There should be a sense of arrival," said Kowalski. So the signage refreshed and the outdoor landscaping spruced up. There has been a big focus, too, on comfort in the bedrooms: bedlinen and towels have been upgraded, a choice of pillows introduced, bathrooms revamped.

All sensible stuff, but who pays for these changes? While the company manages the research and all the marketing, it is up to the hotel owners to fund and implement the new look. Some hotels are owned by Holiday Inn, but the vast majority (at least 3,100) are the property of franchisees. They each need to find up to $250,000 (£167,800) to finance the rebranding. But Kowalski is anticipating the rebranding to improve sales figures by three to seven per cent, "even in these tough times".

Will the relaunch work? In an interview with Kemmons Wilson in 1972, Time magazine credited him with transforming the motel from an "old wayside fleabag into the most popular home away from home". Now plenty of hotels are queuing up to rejoin the party: indeed, Holiday Inn has recently opened a brand- new hotel at Pattaya, Thailand, while in September its first hotel in the Maldives' capital of Male started business, adding to the presence the brand has already established with its resort at Kandooma Fushi on the South Male Atoll.

About 1,000 new Holiday Inns are set to open in the next three or four years. And if a hotel doesn't come up to scratch, then the franchise agreement ends and the Holiday Inn signage is removed – currently at a rate of about three a week. You have to take care of fame.

Holiday Inn UK reservations: 0871 423 4876; holidayinn.co.uk

Holiday Inn Memphis Wolfchase (001 901 266 1952) from $149, room only.

Inns and outs

1952 Kemmons Wilson opens the first Holiday Inn, built in front of his lumberyard in Memphis

1954 The first-ever hotel franchise is sold, for a Holiday Inn in Clarksdale, Mississippi

1960 Montreal is location for the first Holiday Inn outside the US

1963 Holiday Inn is listed on the New York Stock Exchange

1965 Holiday Inn and IBM pioneer the world's first computerised reservations system

1968 Europe's first Holiday Inn opens outside Leiden in Holland

1971 Britain's first Holiday Inn opens in Leicester

1972 Kemmons Wilson makes the cover of Time as 'The man with 300,000 beds'

1979 Kemmons Wilson retires – the company now has 1,752 hotels in more than 50 countries

1988 Holiday Inns International is bought by the British brewers Bass. The North American business follows in 1990

1995 Holiday Inn is the first hotel group to take internet bookings

1998 Bass buys the Intercontinental Hotel Group, adopting the brand name in 2002

2007 IHG announces a relaunch of Holiday Inn, to be completed by the end of 2010

Holiday Inn and me

By Simon Calder

Some US travel icons, such as Boeing and Ford, are adopted unquestioningly in the UK. Yet even though Holiday Inn offers a similar promise of predictable reliability, we are unconvinced by its claim to be "the world's innkeeper".

Perhaps it is the name: when the British go on holiday, we rarely stay in an inn – except, maybe, a Premier Inn. We place the Holiday Inn brand in that same budget box, alongside Travelodge and easyHotel.

My first experiences of Holiday Inn were both involuntary and inexpensive: stays at Toronto airport in 1988 and Paris Orly in 1991 paid for, respectively, by Air Transat and Dan-Air, after flights went awry. One frosty Finnish night I paid for a room at Helsinki airport's Holiday Inn Garden Court (a horticultural suffix that has now been lost). I recall an unusually comfortable bed, but possibly only because I spent the rest of the trip in a ghastly Soviet hotel in St Petersburg.

As the Eastern European dominos began to topple, one symbol of re-joining the capitalist world was the acquisition of a Holiday Inn. The former Yugoslavia was in the forefront, particularly Sarajevo – venue for the 1984 Winter Olympics. But within a few years the Holiday Inn that had been built for the event and helped put the Bosnian capital on the world stage became a target in the Serbs' merciless campaign to punish the benighted city. Its battered shell served as symbol of catastrophic ethnic strife. But the repair job has been commendable. A stay tonight will cost €95, without breakfast. Or shelling.

My stay last year at the first Holiday Inn in Europe, at Leiden in Holland, set me back more than that: €135, well worth it for a fully self-contained version of Center Parcs. The car park of a dated 1968 motel has been innovatively roofed over, filled with half-a-rainforest's worth of greenery and populated with children's play areas and an excellent Italian restaurant, all visible from the refurbished rooms.

A snap decision led me to stay at the Gagudju Crocodile Holiday Inn, "the only full service hotel in Australia's vast Kakadu National Park".

This crocodile-shaped hotel opened up tourism to a compelling wilderness (the size of Wales, give or take a parish or two). You can explore landscapes where man has left only the lightest footprint, then be back in time for a beer, barbie and bed in clean, comfortable surroundings.

I turned up in "soft-opening" week and bagged a cheap room in an excellent hotel where function has not been surrendered to reptilian form – though I understand crocodile tears were shed when it stopped being a Four Seasons and started being a Holiday Inn.