SO FAR THIS year, Red Lion Hotels Corp. has opened 40 hotels in the U.S. and Canada. Now that its brands have been consolidated and stratified into nine distinct flags across all price segments, the publicly traded hotel franchiser is positioned to do more, better and different business in 2018.
That was the overall message to about 300 franchisees and their staff members attending RLH Corp.’s brand conference this week at the Hard Rock Hotel & Casino in Las Vegas.
The messaging was clear and concise when compared to last year’s conference, which was a hurried and awkward introduction of RLH Corp. to hoteliers aligned with Vantage Hospitality Group, just three months after RLH Corp. acquired Vantage, parent of its flagship Americas Best Value Inn and other brands. Included in RLH Corp.’s blended brand family were Settle Inn and GuestHouse, two brands it acquired from Boomerang Hotels in spring 2015. Earlier that same year, Vantage acquired America’s Best Franchising and its brands, including America’s Best Franchising Inn, Jameson Inn, 3 Palms, Country Hearth Inn and the then-dormant Signature Inn.
In September 2016, RLH Corp. purchased the whole shebang and spent the next 12 months whittling its brand portfolio from 13 to nine. It has created two divisions – select service brands and upscale brands and has strategically positioned each brand in one or the other. The brands in the upscale category are Red Lion Hotel, Red Lion Inn & Suites, Hotel RL and Signature. Under the select service umbrella are Signature Inn, GuestHouse, Americas Best Value Inn, Canadas Best Value Inn, Country Hearth and Settle Inn, an extended stay offering.
RLH Corp. CEO Greg Mount said rather than add to the “brand blur” being exacerbated by new names coming into the industry, the company will set itself apart by honing in on what it already has in its brand arsenal. “There are too many brands with little differentiation, and guests are confused,” Mount said during the Dec. 5 general session. “The companies that have created the new brands don’t see what’s coming. Consumers are doing things differently.” It’s not about new flags, he said. It’s about leveraging technology to give consumers what they want when they want it. It’s about keeping franchising costs low so owners can derive a profit from their businesses. And it’s about providing education and support to owners to help them navigate and adapt to the ever-evolving hospitality industry.
Roger Bloss, co-founder of Vantage Hospitality and now executive vice president and president of global sales at RLH Corp., said the company has “undergone significant transformation” over the past year. “The brand stratification is complete. The brands are the foundation for our growth and competitive advantage. We have reintroduced and refreshed brand programs; owners have options.”
Harry Sladich, executive vice president of franchise operations and sales, said the brands have been either repositioned, redefined or enhanced. Some brands are going through revivals while others will stay the same while benefitting from innovations in such areas as technology and in industry-first franchising practices, including signing up for a license online.
Country Hearth, a budget brand, is the first to participate in a new program called Franchiseasy, which enables prospective franchisees to explore and sign a licensing agreement online. It’s an eight-step process in which an owner can choose from an a la carte menu of fee-based services. The franchise disclosure document and the licensing agreement are downloadable; once the agreement is signed and submitted with the initial fee payment, the deal is done. The licensee can choose to fly the Country Hearth flag or go independent and connect to RLH Corp.’s PMS, CRS and distribution network. The second option is a transactional arrangement, not a soft-brand franchise, Mount said.
Signature was relaunched in June, but so far no agreements have been signed, although company representatives said many hoteliers have expressed interest. Mount explained the concept allows owners of older, exterior corridor properties to reimagine, redesign and reposition the assets into a retro-modern offering.
“I am really excited about Signature,” Mount said. Hotel owners and operators are in the real estate business and Signature gives them opportunities to reposition an “underbranded, undercapitalized and forgotten” properties through bold design and extensive programming to compete in the economy and midscale segments. Signature Inn is the economy level brand and Signature Hotel is a midscale tier. The concept targets exterior corridor hotels and small motels. “We want to bring your hotel back to life,” Mount said.
Wayfair, the online furniture retailer, has an agreement to provide the furniture and fixtures. RLH Corp. is also offering incentives such as key money and lower fees to the first 20 signed properties.
Hotel RL, which RLH Corp. introduced in 2014, continues to grow across urban, primary and secondary markets. It is the industry’s only upscale, full-service conversion brand. Mount noted while RLH Corp. embraces new construction, it heavily advocates for conversions as the U.S. lodging industry faces concerns of oversupply. Hotel RL is a tech-focused brand that offers a comfortable bed, good food and great coffee. The brand’s Living Stage – a venue for art, music, literature and social activism – generates community involvement, and its Project Wakeup Call, creates awareness of the epidemic of homelessness throughout the nation.
Eventually all RLH Corp. brands will follow Hotel RL and offer mobile and kiosk check-in and other guest-facing technology such as concierge services and SMS texting. Mobile key is also available in its upscale brands.
Bloss said franchising is becoming an expensive proposition for owners these days. “It gets to the point where there is no profitability for owners anymore.” RLH Corp. has used its technology to lower the costs of doing business and keep franchising fees below industry standards.
With more than 1,100 hotels, RLH Corp. is not close to saturation in any markets. “We are doing things differently and doing it for a reason,” Mount said. “We believe there is a better way to do business, and we want to help owners realize the value creation that is available.”