ALL IN: Red Roof's Commitment to Continued Profitable Growth
By Phil Hugh Chief Development Officer, Red Roof | February 02, 2020
At Red Roof's 2019 Brand Conference, one of our major themes was "Be All In" which means take pride in what you do; be passionate and enthusiastic while making the most of the opportunities you have. It's about an ALL IN attitude and for our owners and franchisees, it means protecting and being passionate about the investment they've made. At Red Roof, our relationships with franchisees are stronger than ever – because we're all aligned on this one goal of being the best at what we do together, being "All In".
Franchise relationships are sacred to us and we keep a finger on the pulse of franchisees by continuously asking them how we're doing. That culture of listening has created an atmosphere of inclusiveness, responsiveness and togetherness. Nurturing strong relationships has led to a happy and satisfied franchisees. In a recent internal survey, 90 percent of our franchisees said they're pleased with their decision to partner with Red Roof. The vast majority of Red Roof franchisees gave top marks to our key top-line drivers – communications, driving business through the brand, well-managed brand quality, service quality, services for the money, and overall performance.
Franchisees who join Red Roof increase revenue and generate more guest satisfaction. Properties that joined Red Roof in 2015 were at an average RevPAR comp set index of 71 percent, and by the end of 2017 had jumped 19 points to 90 percent. Properties that joined in 2016 improved 15 points to a 90% index by the end of 2018.
Our franchise owners also appreciate our innovation. Innovation that drives bookings, encourages guest loyalty and increases revenue. We've developed programs like REDvenue, which is designed specifically to help franchisees maximize revenue. REDvenue gives franchisees the support they need to develop a strong rate strategy – in the form of a professional revenue manager. That person works with them to put together the strategy, evaluate the market, and take advantage of opportunities.
Smart franchisees – successful franchisees – fully utilize REDvenue and their revenue manager's contributions. Another program that helps franchisees is RediCall. We've learned through our RingRedi property audits that around 16 percent of calls to inns go unanswered. That is lost business. RediCall transfers those calls directly to the Red Roof Contact Center, and they're answered by call professionals who are trained in sales and customer service. The Red Roof contact center's conversion rate is tops in the industry. RediCall captures more business, and – again – makes more money.
Franchise relationships are an incredible driver of success and growth for hotel brands. Hotel companies that embrace and nurture their franchisees with a mix of revenue-mindful services, touchpoints, and engagement will be especially rewarded. Hotels that operate with a franchise model must work closely with current franchisees to drive revenue and limit the number of properties their operational team serves per franchise owner to ensure personalized, specific-to-property results. For instance, at Red Roof, there are only 40 franchisees per FOD.
Through these open lines of communication, brand decisions are made with the success of each property in mind. To retain franchise engagement and interest, hotel brands must also offer new product opportunities for current and potential franchise owners. At Red Roof, we've moved into the extended-stay market, a sector that has grown immensely in the past few years. Extended-stay properties currently make up more than a quarter of all hotel development projects in the U.S. pipeline, according to Lodging Econometrics. Product offerings like HomeTowne Studios by Red Roof, The Red Collection®, unique city-center hotels with a focus on locations in major cities, state capitals, and resort destinations and Red Roof PLUS+®, provide a diverse mix of options that keep franchisees excited and onboard.
At Red Roof, we've built our franchise business around the motto, "Genuine Relationships. Real Results.®". Aside from the strength of the brand, the strength and depth of the relationship Red Roof has with franchisees helps drive profitable growth. It's truly genuine relationships that foster the collaboration for winning in the marketplace.
Creating programs that encourage guest retention and loyalty are also key for franchisee satisfaction and business growth. For instance, travelers are always shopping for the best rates, trying to get the best value for their money. With Red Roof's RediPromise®, we assure our guests that they always get the lowest rates on redroof.com or 800-Red Roof.
We also recently revamped our loyalty program. It's now RediRewards™. Travelers want to be rewarded for loyalty; it is a big motivator in lodging decisions. We rebranded from RediCard to RediRewards. The upgrade plays up the benefits more – plus we added new features. With more than 3 million members and growing, RediRewards member stays account for approximately 26 percent of system-wide revenues. In 2018 that was over $176 million. RediRewards members seem to like the RediSave™ program the most. When members rack up enough points, they can combine points with cash to score a 30 percent discount. Red Roof travelers are very budget savvy, so they also love RediAccess™. That program provides them with thousands of discount coupons on retail, entertainment, and service resources in the areas where they're traveling – or at home.
RediRewards members can also shop through RediShop™ for gift cards or other merchandise they love, using their RediPoints. Our RediRewards program is by far the richest one for guests, but still the cheapest loyalty program for owners. One of our guests' favorite features is that RediRewards points rack up very quickly, so they keep coming back.
At Red Roof, change and profitable growth are imbedded in our DNA. We are still a brand that is committed to listening to our consumers, reading and responding to their reviews, and more than that – using the information they share with us to adapt and change. Travelers know they can rely on Red Roof for a consistent experience, no matter where they travel. We created the innovative upscale economy segment, along with a rich loyalty program that our consumers love. In addition, our franchisees are second to none. They are small business owners who care about their guests, and it shows to each traveler who checks in.
The tenets of our master brand – innovation, connection with consumers, and caring – carry through to our sub-brands. Red Roof PLUS+ takes the Red Roof experience to the next level. Guests enjoy sleek and modern upgrades and amenities, still at a value price. Premium bedding, style and service make our PLUS+ properties a step up for our guests.
The Red Collection is a new portfolio of upper-midscale, unique hotels that are located in the cities travelers love to visit. Red Collection hotels offer travelers the opportunity to immerse themselves in the local vibe and culture of the city center. They're unique places to stay, and still offer the Red Roof guarantee of quality and the value prices travelers want.
HomeTowne Studios by Red Roof answers the needs of lots of travelers who want a more home-like place to stay during extended periods away from home. Kitchenettes mean families or business travelers can stock up on some essentials and relax with their favorite snacks after long days. We have more than 50 HomeTowne Studios across the country, with others in the pipeline from New Jersey to California, from Florida to Seattle, so it's easy for travelers to find one near their destination.
At Red Roof, we're all about reading the industry and getting ahead of – not reacting to – consumer demands. We position ourselves for future long-term growth by our proactive approach to trends and innovations, passion for our brand, attention and service to our guests and ongoing technological and program offerings for our employees. Change is the only constant in business if you want to succeed.
The goal at Red Roof is always the highest levels of success for our franchisees, employees and of course, our treasured guests. But we are also a work in progress, and we understand that we have a lot left to do. We depend on our franchisees, employees and guests to help us complete the remainder of our story.
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