HB ON THE SCENE: Red Roof’s new brand designed to open up new markets

NEW ORLEANS—Over the past few years, the number of brands in the industry has exploded as most of the major hotel companies have added to their portfolios. But Andrew “Andy” Alexander, president, Red Roof, said his company’s contribution—The Red Collection, which was launched here last month at the company’s brand conference—is different.

“Think about some of the other soft brands that have launched; they’re launching for a completely different reason,” he said, adding that he suspects the primary reason for those brands is “to put more hotels in the same location.” Conversely, The Red Collection, a city-center brand, is designed to open up new markets to the hotel company.

“We’re trying to put hotels in locations where we aren’t and trying to get into areas where our brand currently doesn’t penetrate,” Alexander explained. “We’re not just saying, ‘OK, I can’t put a Marriott on this corner so I’m going to call it an Autograph and put it right next to it, and act like it’s a different customer… I think you’ll hear from our franchisees that they’re not at all concerned that this will usurp their business because we’re not in Manhattan today, in the center of major cities. We’re in major cities—we’re in San Francisco, we’re in Miami, but we’re at the airport or where the college is located. We’re not in those hearts and we’re hearing some pretty good rumblings that there’s some opportunity for us.”

The first hotel in the collection, The St. Clair Hotel, is expected to open in Chicago in 2018. It’s a reflection of a brand targeting upscale-economy to midscale in city centers that capture the local vibe and culture.

Andy Alexander (center) is asked about his new brand.

“We did pretty extensive research to determine [how to]have a brand that still connected to Red Roof but created an upscale environment and thought process,” Alexander said.

Marina MacDonald, CMO, added, “We always listen to our customer and what we found in our research, the one thing customers want in a city-center location is uniqueness. They don’t want brands. But owners that have boutique hotels or independent hotels want a platform that gives them the flexibility to keep the hotel unique and boutique, but be on a platform for marketing, for loyalty, for purchasing. We listen to two types of customers: one is our franchise owners and the other is the customer.”

What do the guests want? “They don’t want something cookie-cutter; they want to be immersed in the experience; they want something a little different. But they don’t want it to be chic,” MacDonald said. “We have more customers who, when you say urban or hip, they think it’s expensive.”

“Think about it this way: We worked very hard to become the most consistent player in the economy segment. When you go to a Red Roof or a Red Roof Plus, you get way more consistency than you do with our competition—especially Red Roof Plus, you’re seeing 100% consistency,” Alexander added. “That does not necessarily mesh completely with these properties Marina is talking about in center cities. They want to have a consistent experience, but that doesn’t necessarily come from a consistent identical product. How do we get to a point where we can push those two ideas together? And that really is what The Red Collection is. We’re going to still have consistency of Red Roof quality, systems and marketing and all the back up these owners want, without pushing them to have a cookie cutter room design. We’re going to be supportive of them and help them with ideas, but 95% of their room design is going to be relating more to the city or the location of the experience, as opposed to being a Red Roof room.”

Alexander believes this move will open up the company to both new and existing franchisees. “I think it’ll be a mix,” he said, noting that The Red Collection will have a slow-growth strategy. “This is a slow process because we’re focusing on those major cities. Even if this was completely drawn out over a 10-year period, you might only have 100 or 150 of these because there’s only so many locations that really work,” he said. “We think we set this up so there will be pretty heavy demand.” HB

Red Roof by the numbers

500+ number of properties in the company’s portfolio

38 number of properties in the pipeline anticipated to open before year’s end

Bookings are up 16% since Red Roof launched its new website in June.

Since last October, Red Roof’s direct booking strategies have resulted in more than 100,000 Expedia members becoming RediCard members. 35% of their bookings are now direct.

A new bedding package is 20% less expensive than Red Roof’s current offering.

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