Orlando, Fla – At October’s Red Roof Inn Brand Conference, Andrew Alexander, president of Red Roof Inn, announced a new addition to the brand’s ongoing $150-million ‘NextGen’ hotel renovation program. Now, hotels in full compliance with NextGen requirements are given the opportunity to upgrade to a Red Roof Plus property, bringing with it a new premium room type and additional design enhancements.
Properties that have completed a full upgrade in compliance with Red Roof’s NextGen program, including upgraded guestroom interiors, casegoods, flooring and bedding, have the option to become a Plus property. Along with a new premium room type, Plus properties are identified by exterior decoration, including LED lighting, landscaping at the hotel entrance and a lighted canopy to attract attention to the property.
According to Alexander, the idea for Red Roof Plus originated from franchisees requesting for a way to notify guests that their property had completed its upgrades, and find a way to attract them. “They were asking, ‘If we are making this significant investment, can we be sure the customer base can see the distinction?’” Alexander said.
Several Red Roof-managed properties were outfitted with the premium room concept as a test run for their effectiveness. “We went back to Market Metrics to see the data, and the response was so distant we needed a new [property] category,” he said.
A new category
Alexander sees the homogenization of the economy segment as the prime reason for the development of the NextGen renovations, which eventually grew into the Plus property. “The different options in the economy segment have become more similar and less consistent over time,” he said. “We tried to push away from that with NextGen, to avoid inconsistencies.”
Alexander stressed that Red Roof Plus is not a new brand, but a higher-tier property under the existing Red Roof brand. The decision to go ahead with this tiered upgrade strategy stems from the high number of existing Red Roof properties currently under renovation.
“We can’t change the style of our buildings,” Alexander said. “Many of our hotels are 40 years old. Sixty-five percent of our business still comes from walk-in guests, so we needed to find a way to make the outside of our building attractive, showing that there is something new and exciting with the property as a result of our interior renovations.”
Surveys from Market Metrics prove merit behind the project, with test runs done on 29 corporate-managed Red Roof Plus properties that have completed NextGen renovations. These enhancements resulted in an increase of $12 in average daily rate over other non-renovated Red Roof hotels, bringing ADR to $70.77 per night, raising occupancy an average of 70 percent and raising RevPAR to $49.52.
Additionally, Red Roof is requiring its Plus properties to be completely smoke free. “We have the data from Market Metrics, and the surveys and reviews tell us customers are more likely to stay more often in a smoke-free hotel,” Alexander said.
Limited but effective
Due to the investment involved in upgrading a property to comply with Red Roof’s NextGen standards—thereby being eligible to become a Plus property—Alexander expects approximately 8 percent of the brand’s hotels to make the push for Plus, though he had hopes for one-third of Red Roof’s properties eventually taking on the Plus designation. “It isn’t for every operator in every market,” Alexander said. “The costs make it difficult, but there are markets where it can work and we are giving guests and franchisees the choice on whether or not to go through with it. This works where it works.”
New build properties for Red Roof, however, will almost all invariably be designed to be a Plus property regardless of location. “It would be surprising to find a new build where it wouldn’t make sense to have it be a Plus,” Alexander said. However, he was quick to reiterate that the Plus distinction is once again entirely by choice. “Even in the best markets, having a Plus hotel will not be a requirement. But it wouldn’t make sense not to have one, either.”
Thirty more Red Roof properties will be completing the upgrade to Red Roof Plus properties by Q1 2014.
➔ 8 percent
Andrew Alexander, president of Red Roof Inn, expects this number of existing Red Roof properties to convert to Red Roof Plus.
Source: Red Roof Inn