Wrapping up a watershed year for the company, RLH Corporation welcomed franchisees and hospitality professionals from across the country at the Hard Rock Hotel & Casino in Las Vegas from Dec. 4-7 for its 2017 Conference and Global Brand Showcase & Expo. This year’s theme, “Good for Business,” shifted focus onto how the company is evolving to optimize ROI for owners, with highlights on several new initiatives and proprietary tools—from a new website and mobile-friendly franchising process, to brand stratification and the expansion of the company’s guest loyalty program, Hello Rewards.
As the company progresses with an asset-light strategy, it’s putting more focus on its franchisees. RLH Corporation President and CEO Greg Mount said that the company is actively selling off the bulk of its real estate and focusing on acquiring hotel franchise systems—like Vantage Hospitality, which the company bought last year. “When I started four and a half years ago, three percent of our revenue came from franchising, and right now we’re going to approach 60 percent,” Mount said. Satisfied with the foothold and scale that the company now has in the economy segment, Mount added that the acquisitions moving forward will be in the midscale and upscale segments. The company will also focus its efforts on the stratification of its brands in North America and improving owner education, communication, and brand compliance.
By the end of 2018, Mount says that the company’s 13 brands will be reduced to nine conversion-friendly brands that fall into two overarching categories: select-service brands including GuestHouse, Americas Best Value Inn, Canadas Best Value Inn, and Country Hearth Inn & Suites; and midscale/upscale brands including Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, and Settle Inn, with Signature’s “cheap chic” Americana-style brand falling into both categories. Mount explained to hoteliers at the conference that, “There are too many brands with little differentiation. The consumers are confused.” The market is made even more competitive by guests’ changing shopping behavior and the rise of OTAs, which allows guests to compare properties across segments. “We’ll be working with our existing franchisees to consolidate, continue to differentiate, and provide clear vision and brand positioning,” Mount adds.
To onboard even more franchisees, RLH Corporation developed Franchiseasy, a user-friendly tool that allows potential owners to navigate the franchise application process and secure a franchise from their mobile phones or other personal device. “That is something that is really going to revolutionize how companies interact with and work with owners,” Mount said. Coupled with low fees (4 percent all-in fees for Country Hearth Inn & Suites), Mount explained that the tool gives entry-level and economy owners an economical way to generate demand for their hotel and tap into RLH Corporations’ systems. Owners can choose between participating in a RLH Corporation brand or keep the hotel independent. Cloud delivery eliminates the need to send a team to the property, expediting the process. Mount adds that the technology will allow the company to go borderless in the future.
The conference programming also highlighted the growth of Hello Rewards, which successfully grew its membership by 80 percent in 2017, integrating nearly 1,000 properties. Rather than a points-based system that incentivizes direct booking, the Hello Rewards program has simplified its redemption model so that guests can redeem a free night after seven stays, regardless of how they booked their trip. RLH Corporation is also exploring partnerships to source guest perks that franchisees can reward guests with during their stay—from a surprise gift to discounts off travel activities.
The Hello Rewards token model is designed in line with the company’s agnostic approach to its OTA partnerships. Rather than driving guests to book direct, the company is leveraging the scale of OTAs and their marketing budgets to get its brands in front of consumers. Those partnerships have resulted in reduced fees for owners, including a negotiated decrease in Expedia fees from 22 percent to 18 percent in 2017. At the same time, RLH Corporation also announced the launch of an internal program in 2018 to automatically reconcile and recover lost funds from OTA bookings modified by guests, a problem that the company says impacts one in four OTA reservations, resulting in significant financial loss.
RLH Corporation will also rollout new digital initiatives in 2018—from a new website and mobile app to an updated owners’ portal and a pilot of Apple TVs in guestrooms. “It’s about listening and adapting,” Mount told hoteliers at the conference. “It’s important that we understand the challenges that you’re facing out there as a real estate and business operator. It’s also important for us to keep a pulse on the industry – making sure that our branding is relevant, that our technology is leading edge, and, lastly, providing professional support.”
Photo: President and CEO Greg Mount addresses franchises and hospitality professionals at RLH Corporation’s 2017 Conference and Global Brand Showcase & Expo.