On Monday, approximately 1,000 RLH Corporation franchisees gathered at the Mirage in Las Vegas for the company’s 2018 Conference. This three-day event encompassed educational sessions, opportunities to network with colleagues, and, perhaps most enticing, access to the leadership steering RLH Corporation as it continues its asset-light direction.
During the general session on Tuesday, the company’s CEO Greg Mount spoke at length about the disruptors upending the hotel industry, and how hotel brands must embrace change and look forward to achieving success. “We can’t wait for the future; we need to create it,” he said. “We must work together to prepare for the future. The world is changing—by day, by hour, by minute. You have to look to the future.”
He added that the organization’s mission going into 2019 is to drive ADR demand and consumer value. “Scale creates pricing advantage, and we have some serious scale now,” he said. “We also want to deliver a superior return on invested capital for our hotel owners and our innovations are going to continue to propel us forward.”
A Company in Transition
RLH Corporation is in a unique position in the industry. It was only a few years ago that the company announced that it would be transitioning its portfolio from mostly owned hotels to franchised properties. Over the past two years, RLH Corporation has sold off more than $40 million in real estate assets, and has completely shifted focus toward becoming a “world-class franchise organization,” explained Gary Sims, the company’s COO. “We have the potential to be the largest franchise organization in the world,” he said. “That’s a pretty tall order in anybody’s book, to set that kind of goal, but we think we can accomplish it. We think we have a clear path, we think we have a clear strategy, and we know we have a great customer set that’s going to help us get there.”
Sims went on to say that RLH Corporation is relying on its franchisees to let them know when they reach that goal, and that in the meantime, the role of the company is to support these franchisees in every way it can.
Knight’s Inn Acquisition and Further Growth
Earlier this year, RLH Corporation added more than 300 properties to its portfolio with the acquisition of the Knights Inn brand from Wyndham Hotels & Resorts. At its conference, RLH Corporation announced a revamped brand image for Knights Inn, with a more modern logo and updated aesthetic.
Amanda Marcello, RLH Corporation’s senior vice president of brand strategy, said that while Knights Inn was a fantastic addition to the RLH Corporation’s brand roster, the brand was in need of a refresh. “It’s been obvious that the brand […] had been stuck where it was for a period of time. [This goes] beyond just its logo identity, also including its messaging to consumers,” she said.
The updates have been welcomed by Knights Inn owners, many of whom had been attempting to upgrade their properties on their own, without brand guidance, for quite some time. Marcello said that bringing these owners under the RLH Corporation umbrella has given them access to solutions and scale that were not available to them before.
Mount added that there may be more acquisitions on the horizon for RLH Corporation. “For us to continue to grow we’re going to have to continue to acquire,” he said. “I think we’re a good acquirer of some of the smaller, regional brands, and so that’s where we’ll continue to look. If the right opportunity comes in a bigger way, we’ll, of course, look at that too.”
Robots and Revenue Management
Much of the support that RLH Corporation is offering its ever-growing roster of franchisees is through cutting-edge technology. At the 2018 Conference, a good deal of content was centered around the leaps and bounds the company is making on this front.
On Tuesday, the company announced a partnership with startup Peanut Robotics to develop a housekeeping robot that would serve as a backup to the human housekeeping team. “Two years ago we said, ‘robots are coming,’” explained John Edwards, RLH Corporation’s chief information officer. “So we’d been watching the space and trying to find what’s the right fit for our entire portfolio and system of brands.”
These housekeeping robots, which Edwards expects to start piloting next year—first in RLH Corporation’s corporate offices, then in two properties—would be a supplemental solution for housekeepers. “They’ll allow hotels to augment some housekeeping labor and be able to deploy [those services] more effectively.” While these robots are still in the very early stages of development and have a long way to go, the hope is that in just a few years they’d be able to help housekeepers perform their duties, and maybe even help finish up after the full-time staff leaves for the day.
Another hot technology topic at the conference was RLH Corporation’s new partnership with IDeaS Revenue Solutions. Calvin Anderson, chief of revenue optimization, RLH Corporation, explained why he wanted to partner with IDeaS. “The commercial landscape is completely changing and it’s changing every three to four months. We needed am RMS that partnered machine with man in a really truly effective way, and a lot of the options out were very surface level. They hadn’t done the not-sexy homework of making sure the deep, deep, deep questions were answered. IDeaS did that homework, and that’s why they were the best choice for our new RMS.”
Anderson also said that the partnership with IDeaS is just one area where RLH Corporation is looking to upend the status quo, and that the company is moving to bring new initiatives and resources to its owners. “This industry is begging to get disrupted,” he remarked, adding that RLH Corporation is uniquely positioned to enjoy the benefits of scale, without being bogged down by the inertia that sometimes comes with being part of a larger entity “We are big enough to make an impact, but small enough to be able to change or even scrap things if we need to. It’s a fun and amazing environment, and that’s why I, and so many of us, are here.”