HM on Location: Red Roof intros dual-brand prototype, other initiatives

COLORADO SPRINGS, COLO. — Red Roof kicked off its convention with a major tech announcement about its partnership with HotelKey, but that was by no means the only news that was shared during the event at The Broadmoor.

Ted Hutchins, Red Roof’s chief information officer, shared with the more than 1,000 attendees that a new infotainment system will be a brand standard in the coming months.

“Infotainment is a very exciting thing. Guests expect it now because they expect the same environment they have at home,” he said. “We picked three very, very good partners. We're excited about those partners. We're really trying to drive that at-home experience and consistency across all of our properties.”

World Cinema, Velocity and Enseo will provide propertywide live HD TV, supplied by Dish Business, and the offering is designed specifically for hotels, according to Sharee Brell, VP, IT governance at Red Roof.

“It is so easy for guests to use and it offers HBO Max, Netflix and Hulu, among other streamers,” she said. “Guests can even bring their own devices, including gaming consoles, and they plug it right in in the front—so no more finding your old TV wiring rearranged in the morning.”

The system will be rolled out as each property ends its current entertainment contract, which means it could take up to three years for the entire brand to switch over, Hutchins said.

Marketing Update

Red Roof recently started phasing in a partnership with Zeta Global, a data-powered marketing company that unifies identity, intelligence and activation across all channels to deliver better experiences for consumers.

“We've always been focusing on delivering the best revenue for our owners, as well as excellent guest experience. In the marketing world, we call that the customer journey,” said Marina MacDonald, Red Roof’s chief marketing officer. “Zeta’s deep consumer database contains information about more than 225 million American consumers … their spending habits, online browsing habits, their interests, their demographics, social media interactions, shopping behaviors, and the most important for us—which hotels they stay at.”

Today, it’s all about personalization and Zeta Global helps Red Roof connect directly with the consumer, according to MacDonald.

“We're able to target our advertising spending to reach the right consumer with the right message and entice those that have visited other hotels in our comp set to switch to Red Roof,” she said. “Through September we have delivered more than 208 million advertising impressions in paid banner ads resulting in over $40 million in revenue. That's more than all of 2019 and over 10 percent higher than the same period of 2021. That return on ad spend is $6.42 per dollar spent and overall through September, and our mobile app have contributed over $76 million, a 22 percent increase over last year.”

The company’s RediRewards loyalty program introduced member exclusive rates earlier this year, which has also boosted engagement and revenue, MacDonald said.

Red Roof also introduced a new RediResponse program, which is a brandwide, in-house solution for reputation management. The program handles responses to all major online guest reviews and completed surveys, enhancing the properties’ online profile and reputation.

New Prototype

Red Roof has more than 60,000 guestrooms at 679 properties, according to Chief Development Officer Matthew Hostetler, with nearly 20 properties on deck to open through the end of the year. More than 30 new projects are already on the books for 2023, he said.

More and more franchisees are interested in building dual brands, so the Red Roof is introducing a new-build prototype that combines the Red Roof and HomeTowne Studios brands.

“Dual branding is a trend that has swept in over the past couple of years and now Red Roof is introducing into the economy segment a dual-branded property that offers both traditional hotel stays and long-term stay options,” said Rick Schaeffer, regional VP, franchise development. “The extended-stay rooms are outfitted with all the traditional amenities for a longer stay like kitchenettes and storage. The rest of the hotel offers traditional hotel rooms for shorter stays.”

Red Roof President George Limbert said the efficiency of the prototype is "incredible."

“From a labor perspective, efficiency from a square footage perspective, efficiency from a build cost perspective,” he said. “We really kept the owner operator in mind as we were building these prototypes out, both the HomeTowne Studios [prototype that was introduced in 2021] and the dual-brand prototype and also the guest.”

The prototype is flexible in terms of room count, size and other factors depending on what is right for each particular development, according to Hostetler.

There’s also a new-build prototype in the works for the Red Roof Plus+ brand that includes more differentiation from the traditional Red Roof properties.

Overall Performance

  • Revenue for 2021 was 16 percent higher than 2019, one of the first brands to show positive revenue growth over 2019.
  • Revenue for the Red Roof brand from January through September 2022 increased 10 percent year over year, and RevPAR is up 9 percent for the same period.
  • Revenue from the website, mobile app, and central reservation system is growing faster than other channels.
  • Revenue from the Website and Mobile App is 22 percent higher than 2021.
  • Revenue from CRS is 19 percent higher than 2021.
  • RediRewards enrollment increased 48.2 percent from June to September. 

Taking Stock

Limbert pointed out that all of the moves he and the executive team makes are focused on the overall experience for all involved in Red Roof.

“When I became president in August of ’21, I wanted to make sure we were fully aligned with one path forward, creating a clear statement that would define and unify Red Roof,” he said. “The vision statement we developed guides all our decisions every day. That statement is to provide the best experience and value in the lodging industry for our guests, owners, team members, partners and communities—keeping all our stakeholders in mind and being diligent about developing ways of providing the best experience and value.”

The company kicked off its 50th anniversary at the event, which will be celebrated throughout 2023.

“We're excited for the future. We're excited for what's to come,” Limbert said. “We're just happy that we led this recovery during the pandemic, and we'll lead through anything else. We're not afraid. We'll go toe to toe any day, anytime, anyplace you want. Because that's the kind of brand we are.”