Earlier this month, Red Roof hosted its 2019 Brand Conference in Nashville, Tenn. LODGING caught up with Red Roof’s president, Andrew Alexander, to talk about the conference and upcoming plans for Red Roof’s hotels.
What were the biggest areas of focus at the conference this year?
There were a few. First, we focused on the growth of the brand. We’re currently working with a market in which it’s a little more difficult than in years past to grow a brand, but we’ve had continued success. Some of our competitors—if you exclude major acquisitions—only saw 1 or 2 percent growth over the last two years, while Red Roof as a brand has grown over 13 percent. We view that as a continuation in strong demand for our dials of franchising. We don’t necessarily sit here and say we’re better, but we do make sense for a lot of franchisees.
That really dovetails into the second thing that we are very proud of—our franchisee satisfaction. We did a franchisee satisfaction survey and found that 86 percent of our franchisees marked that they were “highly satisfied” doing deals with Red Roof and recommend doing a deal with Red Roof to others. Quite frankly, we’re a little concerned about doing another one! How much better can you get?
We were also thrilled to find out that 90 percent of our franchisees are supportive of the brand and would do another deal with Red Roof, which is a number that we’re very proud of.
Why do you think your franchisee satisfaction is so high?
I believe it’s because we have a genuine relationship with our franchisees. They feel that they have a voice in how we operate as a company and know how they fit into the brand’s infrastructure. We had great fun at this year’s conference with skits and other light-hearted events, but we also had an owners meeting where they were able to—in an open forum—ask any question they wanted. We gave them honest responses. That’s something they appreciate. Not all the brands give them that opportunity.
What else is Red Roof working on?
We also have been doing a lot with technology. As a brand, while hospitality is first and foremost, I find myself saying that we’re a technology company more and more often. For example, we’re updating our property management system platform to have what I call an intuitive, millennial-friendly interface. We can make it easy on our employees and increase satisfaction and retention there.
Were there any other announcements to come out of the conference?
We announced that before the end of the year, we’ll be moving into Canada. There’s a hotel that’s currently under renovation at the Calgary Airport that will soon become a Red Roof. We’re thrilled to now be entering this market and our partners there are just incredible people and incredible entrepreneurs and we know that we’re going to be able to grow with them. They have some other opportunities for us that we’re looking into up North as well.
What’s driving Red Roof’s growth?
Well, until recently the number of franchisees we had with multiple properties was very small. Over the last 5 or 6 years, that’s grown substantially because they’ve been profitable with the brand, and because the brand listens to what they need to grow and be successful. We deliver. We have definitely seen growth on the franchise side of the business with multi-unit owners and I do think that’s because when you see a good thing, you keep coming back for more. Additionally we have some of growth coming from conversions and through corporate transfers. The main through line though is that our franchisees want more and more. That’s been pretty satisfying.
Is there anything in the industry keeping you up at night?
There are a couple of things. One is cyber security. In that arena, we are as proactive as I think any of our peers. We’ve gone through several security reviews by outside third parties and have received outstanding results. But cyber security is something you can never be proactive enough about, so we will continue to monitor our systems and improve where we see opportunities.
In fact, the safety and security of the guests and our employees is something that keeps not just me, but also our entire senior executive team and general manager population up at night. There’s been a lot of focus on all sorts of guest and employee safety programs and initiatives. We’ve committed to AHLA’s 5 Star Promise to make our employees and our guests as safe as possible. That’s something that we always worry about and always strive to improve where we can.
Red Roof is also in a unique position in that you have quite a bit of scale, but you’re not enormous like some of your competitors. How does that work to your advantage?
We have a couple of advantages. We’re still nimble and quick. Our decision making at the corporate level is lightning fast. If we need to make a decision and implement a solution, we can do that very, very quickly. We also still have 97 hotels that are corporately managed. While they’re part of the franchise system, we manage them with a subsidiary of our company. And that gives us the ability to very quickly when implementing solutions. It really drives our business forward because our franchisees know that when we offer up a solution that it’s been tried and tested. It gives them confidence that all the operational kinks have been worked out.
One more question. What was your favorite part of conference?
The best thing about our brand conference is that it gives me and my senior team the ability to laugh at ourselves. It really creates a bond with the people we do business with, both the corporate people and certainly the franchise community. Once they see that we’re willing to laugh at ourselves, they truly become our friends and not just our business partners. It certainly gives a boost to everyone’s spirit. You can see the momentum that builds throughout the conference.