Today, in conjunction with its 2020 Virtual Conference and Expo, RLH Corporation announced that it will be relaunching its GuestHouse International brand as GuestHouse Extended Stay. The new upper-economy extended-stay brand was reimagined so that RLH Corporation could meet the ever-increasing demand for longer stays. It was also developed to be ideal for conversion opportunities, which many expect will be plentiful in the immediate future. GuestHouse Extended Stay will be RLH Corporation’s first extended-stay brand.
In an exclusive interview with LODGING, RLH Corporation CEO John Russell explained that the company had been working on plans to relaunch the GuestHouse International brand as an extended-stay product before the pandemic. When COVID-19 upended the industry in March, it just solidified those plans. “If you look at our brands, we have offerings that range from budget to upscale. The only thing we were missing was extended stay. We had made the decision to convert GuestHouse before COVID hit, but the pandemic reinforced that decision and likely sped up the timeframe,” Russell says.
EVP of Lodging Development & Franchise Operations Harry Sladich, who spoke to LODGING along with Russell, concurs. “This was always the plan. Extended stay was a segment that we didn’t have and to be able to offer an extended-stay product would just put the cherry on top of our lineup of brands.” Sladich adds that the performance of extended-stay properties during the pandemic was another factor in pushing this change forward. “It’s just a more resilient segment,” he says, citing Kalibri Labs data that showed extended-stay RevPAR performed 14.4 percent better than non-extended-stay hotels in March 2020.
Sladich notes that GuestHouse Extended Stay is primed for success in the current lodging environment, where owners may be looking to switch flags and change segments. “This brand can be adopted into many different footprints. That’s a home run.” Sladich adds, “Overall, we really looked at it as a conversion brand and we think we have a lot of opportunity to help owners not only become competitive again, but also increase their average length of stay and their ADR.”
The brand was expressly designed with conversions in mind. Only 10 percent of a property’s inventory will need to have a full kitchen, while other rooms can offer a kitchenette. The rooms are designed so that the kitchen or kitchenette backs up to the bathroom so that they can be hooked up to the existing plumbing.
Sladich notes that owners from RLH Corporation’s owner advisory boards played an active role in the brand’s development, adding that they were the ones who suggested that kitchens share plumbing with the bathrooms. RLH Corporation also developed modular guestroom upgrade options that will decrease downtime and conversion costs.
The GuestHouse Extended Stay design can also be implemented in hotels with exterior corridors, which traditionally can be difficult to convert, depending on a brand’s standards. “Some of these exterior corridor properties were built in the 70s and their rooms are huge. The fact that we can put an extended-stay floorplan into that footprint is exciting,” Sladich describes.
Sladich says that the new brand’s flexibility is one of its key selling points. He explains that while guestrooms will have to closely meet the brand standards—which include modern blackout window treatments, refreshed art packages, a dining table that can be used for working and eating, and one soft seating element—owners will have opportunities to personalize their hotels. “Not every building is going to look alike and not every community is going to look alike—and that’s a good thing! We want them to create properties that fit their communities.”
Russell agrees. “You want to have some kind of variety. All the basic essentials are there, but the look and feel would probably be a lot different in Colorado than it is in Florida.”
Sladich also spoke about GuestHouse Extended Stay’s suitability for dual-branded properties. “Dual branding is another huge opportunity for us. We’re finding that in some very large properties, it doesn’t make sense to have 170 rooms of one brand. Some of these properties even encompass separate buildings! So, there’s a great opportunity to add extended-stay rooms into these existing properties, partnering them with maybe a Red Lion, Knights Inn, or even a Hotel RL. By opening a dual-branded hotel, our owners are really able to work with their business mix,” Sladich explains.
Russell notes that the people staying at extend-stay hotels have very different needs than a typical hotel guest. As such, GuestHouse Extended Stay will have an in-lobby marketplace with fresh snacks and beverages and a food delivery partnership through a major meal delivery service. All GuestHouse Extended Stay properties will offer laundry facilities and a way for guests to exercise, whether at an on-property gym or through a partnership with a nearby facility. “This is a product that customers are looking for, and we are in a position to deliver it,” Russell says.
In the Pipeline
GuestHouse Extended Stay is officially launching today at the 2020 RLH Corporation Virtual Conference & Expo, but Russell notes that the owners across the company’s portfolio have already expressed interest in the brand. Currently, the RLH Corporation team is in talks regarding 15 conversions, as well as six new-build properties. “If we can get four or five of those to open in the near future, that would be great—especially the new builds,” Russell says. “It’s a little more difficult today to get access to capital, and it’s going to be that way for a while. But the folks who are reaching out already have some capital in place.”
Sladich adds that he’s very excited to see how far this brand will go. “We all know how well the extended-stay market segment has been doing throughout the pandemic, and if you don’t have the traditional box, we have a solution for you to get into that part of our business and really compete in your market.”
Rolling out a new brand during a pandemic is a gutsy move, and Russell notes that there will be more big news to come from RLH Corporation’s virtual conference today and tomorrow. “We’ve got some great marketing announcements as well. We’re developing a new, more user-friendly website, and something else I can’t talk about quite yet. It’s been a unique experience putting together this conference and we have exciting news to share.”