Red Roof’s 2022 Brand Conference, held at The Broadmoor in Colorado Springs, Colorado, took a lighthearted approach to welcoming over 1,000 franchisees, owners, and hotel workers. Along with the merriment that came with seeing colleagues and peers in person after a while apart, general sessions energized attendees with entertaining features such as a Good Morning Red Roof morning show spoof. But although the conference was a cheerful occasion, Red Roof also shared several important updates, including improved company performance over both 2019 and 2021. LODGING attended the conference and learned how the company is supporting franchisees, leveraging partnerships, and implementing new practices to mobilize its success.
“Being a privately held company, we’re not chasing quarterly reporting for shareholders,” said George Limbert, president of Red Roof. “We’re really in this together with our franchisees, and that’s why you see a different type of tone to our conferences because … this is a true partnership.”
A New Collaboration
At the onset of the conference, Limbert introduced a collaboration with HotelKey that will be implemented across Red Roof’s portfolio of U.S. hotels, allowing franchisees to operate and manage their properties from mobile and tablet devices. Limbert noted that the HotelKey platform will give Red Roof franchisees property management operations, central reservation systems, and more to enhance their operating experience.
After deciding to sunset its previous, company-owned software in favor of one that would give owners and guests what they need and expect from hotels today, Red Roof is minimizing risk for owners by not requiring any additional purchases for the HotelKey software. Ted Hutchinson, Red Roof’s chief information officer, said that, first and foremost, the company wants to ensure its properties are successful. Once the hotels are using the software, he said, “we’ll start applying new technology if they want it, and it’s optional. If they don’t want to do tablet-based check in, they can continue to use the PCs they have today.”
Red Roof is also working on partnerships to make operations more efficient and drive incremental revenue for franchisees. For example, the company has partnered with Zeta Global, which uses marketing informed by data to drive consumer experiences, positioning Red Roof to take advantage of increased demand. Having data that reveals consumer preferences ultimately paves the way for owners to increase profitability.
In the current travel environment, guests expect to be able to consume their preferred content while on the road. In response, Red Roof is leveraging technology partnerships with companies such as WorldCinema, Velocity, and DISH Business to make infotainment a brand standard. Hutchinson shared, “We’re asking the franchisees not to renew their infotainment anymore. Now, let’s start converting them over the next three years. So, it’ll take some time, but we’re really trying drive that at-home experience [consistently] across all our properties.”
Additional partnerships highlighted at the conference included using ibex and its call centers as consumer resources, as well as the Red Roof RediResponse program, which is an in-house solution that responds to guest reviews and surveys to enhance online appearance.
In 2021, Red Roof announced a new prototype for its HomeTowne Studios brand. With the company nearing 10 dual-branded hotels throughout the United States, the need for a new-construction prototype for dual-branded Red Roof and HomeTowne Studios properties became apparent. Providing for both the transient desires of traditional Red Roof guests and the long-term needs of HomeTowne Studios travelers, the concept was an “absolute no-brainer” according to Limbert. He added, “The efficiency of the prototype is really incredible from a labor perspective—efficiency from a square-footage perspective, efficiency from a build-cost perspective. We really kept the owner-operator in mind as we were building these prototypes out, both the HomeTowne Studios and the dual-brand prototype.”
While there are specific requirements for building the dual-brand prototype, Red Roof is keeping multiple considerations in mind. Market needs vary and require different options for guests. As such, the company is being flexible with owners that are interested in the concept. Matthew Hostetler, Red Roof’s chief development officer, noted, “Not all markets are 124-key markets. So, if there’s an opportunity to do 80 rooms in a market because that’s what the feasibility of the size of the construction should be, that’s what we’re going to do.” Thus, Red Roof isn’t supporting conversions for the sake of changing flags; they’re pursuing conversions that make sense in their market. Hostetler added that new construction in the extended-stay market will keep Red Roof “moving forward for another 50 years.”
As for doing right by existing properties, Fouad Malouf, Red Roof’s senior vice president of franchise operations, weighed in on the status of current properties coming out of the financial woes of the COVID-19 pandemic. Red Roof began looking at the properties that had “quality issues that we wanted to address and … where they were on that spectrum.” By working with hotels on property improvement plans, Red Roof is supporting franchisees’ journey to heighten the quality of their product while being flexible with timelines. Some hotels, Malouf said, maintained well throughout the pandemic, but they’re looking at each property on a case-by-case basis to make sure each product is well-maintained and updated.”
Red Roof executives took the time to give attendees up-to-date performance metrics at the conference, including a 16 percent rise in revenue over 2019 and year-to-date, a 10 percent increase in revenue from 2021. Limbert shared, “We started beating 2019 performance in April of 2021. … Those are big numbers [compared to] pre-pandemic, and that’s a pretty exciting thing.”
Alex Cisneros, Red Roof’s senior vice president of revenue generation, attributes the company’s success to stepping back and resetting strategies when opportunity to do so arose during COVID. Cisneros said, “We quickly accelerated the ADR improvement, and we started adjusting strategies [based] on occupancy.” He continued, “We’re going to continue to leverage the analytics that we have put in place, and we are going to be able to quickly change the platform. But, in the background, the technology, the analytics, the philosophy of revenue generation is going to continue.”
And as a privately held company, Red Roof sees “some of the upcoming trends that other brands don’t see,” according to Cisneros. When the downturn began, Red Roof started noticing certain consumer behaviors through its data. He said the company has “multiple strategies and plans to continue to adjust to market conditions” if another downturn comes by noticing a slowdown in certain areas, moving their resources, and monitoring the situation.
Red Roof’s Chief Marketing Officer Marina MacDonald added that Red Roof’s successful performance has resulted from both “the relationship we have with our franchisees” and “the relationships we have with all different types of customers.” During the pandemic, she noted, both the economy and extended-stay segments were stars. But those relationships stood as a testament and a cornerstone of working toward the company’s renewed vision.
Supporting Women Ownership
Red Roof is focused on ensuring its franchisees and customers are proud of their product, and that includes supporting diversity and inclusion. Executives emphasized the company’s quest to reach a 40 percent women-owned portfolio, noting that 31 percent of its current ownership identify as women. The company confirmed its commitment to supporting women owners and providing them with resources for success.
The energetic attendees seemed optimistic about news coming from the show. Going forward, Red Roof will continue investing in new ways to increase operational efficiencies for franchisees and be flexible where needed.