DALLAS—Red Roof’s 2021 Dallas regional meeting provided attendees with updates from a variety of operational departments, including marketing, operations and technology and a look at what will be changing in the short and long term.
According to Chief Information Officer Ted Hutchins, Red Roof is heading toward a major technology upgrade. These include member exclusive rates online, which will be available only to those enrolled in the RediRewards loyalty program.
“Its intention is to give [guests] another reason to book direct, and it brings us to parity with all of the large brands in the U.S.,” he said. “We're trying to drive that value to the RediRewards member and then lower the cost of the booking.”
The plan is to have it rolled out by May, before most Red Roof properties’ high seasons.
Another update is the content on lobby televisions, which Hutchins called the first step in Red Roof’s plan for an electronic lobby. Red Roof is partnering with Roku to automate the process, reducing the time and effort required at each property to keep the information up to date.
“We developed our own channel on Roku that displays content and it's free to all of us,” Hutchins said. “All it's costing the brand is a little bit of development time.”
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The display will feature standard Red Roof photos based on the brand the hotel is part of, the weather, date, time and location of the property. The company is working on ways for individual properties to go beyond the standard to highlight specific events or attractions.
The next step in the electronic lobby will be iPads on check-in counters instead of signs for advertisements and other information, as well as smaller credit-card readers. Electronic registration cards will help the company with it’s data-security efforts as well as reduce the amount of paper—and resultant shredding—on-property, Hutchins said.
Looking further ahead during the next three years, Hutchins said franchisees and owners should be expecting in-room infotainment upgrades, radio frequency ID locks (no more magstripes), the ability to check in on the company’s app (guests already can check out on the app) and single-sign-on for operations.
Marketing Update
Marina MacDonald, chief marketing officer, called the company “nimble and responsible” in terms of messaging, highlighting the company’s Rest & Repeat and cleanliness campaigns.
MacDonald said website enhancements that were launched this year include more transparency about the company’s pet policy and fees, while more multilingual options will be available early next year.
“Redroof.com [has seen an] 87 percent increase [in traffic] over 2020 but more impressively it's 34 percent over 2019,” she said. “Revenue is up 71 percent over 2020. More impressive: 17 percent over 2019 and our conversion is very, very healthy. All of that is great news.
The consumer and app revenue for the HomeTowne Studios by Red Roof brand is up 56 percent to 2020 but 200 percent over 2019, according to MacDonald, and the brand’s website will be redesigned soon.
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Loyalty marketing manager Brenda Eddy shared that as of the end of September, the RediRewards program had more than 3.7 million members and is on track to hit 4 million in 2022. Total revenue through September for RediRewards was $132 million.
One marketing and operations issue that has been generating a lot of discussion is the company’s pet policy. Pets stay free at Red Roof properties, including Red Roof Plus, Red Collection and HomeTowne Studios, but damage and other issues have prompted some to call for a charge for pets.
Red Roof partnered with Medallia to survey guests, and more than 12 of them said that the pets stay free policy is the primary reason they select Red Roof, translating into $93 million in annual revenue, according to MacDonald.
Some other statistics from the research:
- 89 percent of Red Roof guests who traveled with pets are aware of that policy.
- 23 percent of guests of the competition who travel with pets are aware of Red Roof’s policy.
- 95 percent of Red Roof’s current guests with pets said they chose Red Roof because of the policy.
- 84 percent of prospective guests said that now that they know about Red Roof’s policy, it would make Red Roof their first or most likely choice.
In addition, the number of guests who said they stay at a Red Roof property with their pet and without their pet has grown about 40 percent in the past three years.
“These guests are very loyal: 69 percent of them said they stay with us three plus times a year with a pet,” Eddy said. “Maybe even more importantly, they book direct: 87 percent of the time, people traveling with their pets book direct so no expensive [online travel agency] fees.”
The real question, according to Eddy, was what would happen if Red Roof changed the policy.
“It does bring a significant risk to us,” Eddy said. “We asked them what a minimal charge, just $5 a night for pets, would do to their behavior. The reactions were pretty significant. 39 percent of them said Red Roof would no longer be my first choice or I would avoid Red Roof altogether. 39 percent of that $93 million we talked about earlier means about $36 million could be at risk.”
In other words, she said: “For every one roomnight that we could lose from a current pet guest at a $55 [average daily rate] means that we need to retain 11 of them who are willing to pay us the additional $5.”
No decision about changing the policy has been made at this point, according to MacDonald.
“The topic warrants a great deal of discussion and thought, and we are working and having those conversations with our FAC partners,” she said. “We will continue to evaluate the advantages and risks of a potential policy change.”
Vision Evolution
Also during the event, President George Limbert discussed the vision of the company and how it’s evolved in the past year. In October 2020, Limbert had a call with the company’s franchise advisory council, which challenged senior leadership to define Red Roof’s mission.
“What is your what is your vision as an organization? Where do you fit into this crazy world that we all just experienced?” he said they asked. “It got it got me thinking and every member of senior management thinking, and so shortly after I became president, we sat down and had kind of a think tank session to really figure out who we are.”
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Limbert said the first thing they did was to go back to the beginning, to founder Jim Trueman’s motto: To offer clean and comfortable rooms as well as attentive guest service and charge less.
“That still is true today. We care about our guests. We care about clean, comfortable rooms, right? We are an economy hotel brand, we want to charge less,” he said. “But when we sat down with the senior team, we said there's some pieces and parts and there's some stakeholders in this game that are missing. So we evolved our vision.”
The new vision includes “every group that makes Red Roof so great,” according to Limbert: "To provide the best experience and value in the lodging industry for our guests, owners, team members, partners and communities."