Red Roof Inn's CDO on the economy brand's expansion plans

Red Roof Inn is in the midst of a hot development streak right now. The company is on track to open its 400th hotel this year, has been expanding its footprint in new states and regions and even has international development plans in the works. One of the forces behind this development push is CDO Phil Hugh, who has been with the company since December 2013. Hugh shared some details with Hotel Management about the factors taking the economy brand to the next level.

1: Phil, what attracted you to Red Roof Inn when you joined the company last year?

PH: There were three key metrics: First was the 60-percent reservations contribution. Second, the fact that Red Roof Inn has received top scores four years in a row in Market Metrix’s ReviewMatrix Consumer Satisfaction Index. Then, learning that 85 percent of our franchisees say they’re extremely happy with us.

FREE DAILY NEWSLETTER

Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

2: Tell us about some of the growth milestones the company hit this year. 

PH: We created an initiative called Team Grow and we put a lot of people on franchise sales, working with existing franchisees. We made the commitment to grow our RevPAR index, drive profitability and increase top-line revenue. We’re on our way to signing more than 70 agreements by the end of the year and we’ll get to 400 before the end of the year.

3: Two buzzwords circling Red Roof Inn these days are “NextGen” and “Red Roof Plus.” Give us an update on these programs and how they factor into development?

PH: The brand’s NextGen design [a requirement that includes upgrades to wood-like floors, vessel sinks, flat-screen TVs and more] is huge. Everyone in the system is working toward this renovation. As for Red Roof Plus, it’s a phenomenal story for us—it’s for those properties that are committed to hitting the NextGen renovation 100 percent, and then also offer a higher level of service. Red Roof Plus will comprise about 20 to 30 percent of the brand and be located in high-barrier-to-entry markets and higher RevPAR areas.

4: How do you and your franchisees get this designation? 

PH: A franchisee can enter the brand as a core Red Roof Inn and work toward the Plus designation. They must complete all the brand standard items in addition to the extra training. The Plus properties in the system now are performing at $51 RevPAR, driven by an ADR of $71.93.

5: That’s a lot of change for an economy brand. What’s your take on the economy landscape these days?

PH: It’s really strong. Owners are looking for more than just distribution; they want a strong partner, someone they can work with. In economy, you need a strong brand to give consumers confidence that when they pull off the highway for the night, they can be comfortable. And now franchisees are really participating. Franchising is a tough business and for our franchisees to say they’re happy and want to reinvest with us, just makes it great.

Suggested Articles

Should all of 2020's scheduled hotels come online as planned, China will open the most new rooms next year since the cyclical peak in 2014.

Located within the city’s former World Trade Center building, the property will feature 341 guestrooms and 92 residences.

Growing interest in the lodging sector from institutional investors looking for steady returns has spurred an increase in ground-rent deals.