RLHC (Red Lion Hotels Corporation) has had a busy year—and there’s more to come. President and CEO Greg Mount chatted with Hotel Business about the integration of the Vantage Hotels brands, the company’s new brand realignment and its plans for future growth.
RLHC recently unveiled its new alignment of brands. Tell me about your strategy. Through our brand realignment, we have ensured that each brand has a unique position in the market, while providing owners with options to move between brands as their business needs, property and/or market change. We want to make franchising easy while providing a ROIC.
Some of the brands that came with the Vantage acquisition weren’t mentioned in the new alignment. What are the plans there? The brands not mentioned in the alignment—3 Palms Hotels & Resorts, Jameson Inn, Lexington and America’s Best Inns & Suites—will not be focal points for new development in the future. Property owners who wish to remain with their brand may do so and will continue to receive marketing and operational support, as well as incentives and opportunities to shift to RLHC’s core brands.
What’s next in the integration process? We now have all of our 1,100-plus properties on one website and integrated with our industry-leading technology and online marketing. We are continuing to improve the channel access and e-commerce for these brands. We will also be providing all hotels with the opportunity to leverage our RevPak guest management system, which is designed to drive guests to RLHC properties and provide a single view of each customer, account and hotel client.
RLHC took a different path than some other brands, partnering with Expedia for exclusive rates for Hello Rewards. How has this been going? We have a strong relationship with Expedia and other OTAs, not because we’ve decided to swim in the opposite direction of the other hotel companies, but rather to effectively monetize a marketplace that represents over 50% of the rooms booked. Rather than undercutting Expedia at the expense of our franchisee, we’re instead taking advantage of the exposure we receive from cooperating with Expedia and focusing our customer acquisition efforts on guests after they book through the site. The results have been promising in terms of not only Hello Rewards membership growth, but in terms of reducing the cost of customer acquisition. We’ve seen enough success from our initial results to encourage us to expand this program.
Tell me about Hotel RL. As you’ve rolled it out, has it gone as you’ve expected? We started the brand just two years ago and now have 11 properties, seven of which are open, and have openings planned in St. Louis; College Station, TX; Houston; and Long Island City, NY. Hotel RL is an important element to our strategy and it can increase profitability for the entire enterprise. Hotel RL is clearly on the cutting edge and, not surprisingly, some of its key elements are resonating with guests. The Living Stage, for example, is so popular that it is already being copied by other hotels. The brand is being well received. It’s still in the early days, but we are encouraged by the progress we have made thus far in guest response to the Hotel RL concept, as well as owners looking to differentiate themselves from a sea of sameness and commoditization. Large systems are proliferating more brands competing within their system and potentially negatively impacting performance at the expense of their franchisee.
RLHC recently implemented online franchising for Country Hearth. Why? We want to take the hassle out of franchising and become the franchise of choice for hotel owners looking for independence, yet still provide the contribution and pricing of an innovative distribution system. By offering owners the ability to complete the entire process online, we are making it easier than ever to join RLHC. Once part of our system, properties will be measured by their online reputations, removing another inspection process and cost that owners dread. Country Hearth will allow owners the freedom to either operate as an independent hotel or use the brand’s trademark. Whether trademarked as a Country Hearth or not, hotels in the system will benefit from the company’s robust reservations system, distribution and channel management, including negotiated deals with online travel agents.
How would you describe the pipeline for the overall portfolio? Our pipeline and activity have never been better as owners begin to understand that alternatives exist that will provide them access to innovations in customer acquisition and capabilities more in line with the changing booking preference of consumers. We think owners are looking for innovative brands like ours that have an ethos, a culture aligned with allowing consumers to experience and interact with their travel experience in a more personal way.
What’s your perspective on the overall landscape for hospitality? The marketplace/customer acquisition is shifting and business models are beginning to converge. As chains have shifted away from hotel ownership and OTAs build out a suite of back-end hotel services, both are evolving as end-to-end distribution partners to hotel owners. The brand systems of the future must evolve if they intend to continue to compete. The proliferation of companies with wide reach like Amazon and, even more directly in our industry, Airbnb, are examples of this consumer shift.
Are there any tech innovations or solutions that you view as a game changer for the hospitality industry? Artificial Intelligence (AI). I believe it’s the next “big thing” for our industry. Allowing “bots” to interact with our guests virtually and provide more services faster will be a great evolution. Then taking that data and harnessing that to empower our hotel teams to improve a guest’s stay is where it gets really exciting. HB
