With a successful partnership with Expedia already in place, RLH Corporation leader Greg Mount said the company will extend its relationship to other OTAs.
LAS VEGAS—RLH Corporation’s partnership to list its loyalty room rates on Expedia in exchange for allowing consumers to register for its Hello Rewards loyalty program has been a big success thus far, but more education is needed to make hotel owners more comfortable with the concept, according to executives who spoke last week at the company’s annual conference.
“As we start to embrace and onboard more owners in the economy segment, they’re getting introduced to this and trying to understand the cost process,” said RLHC President and CEO Greg Mount during a meeting question-and-answer session at the Hard Rock Hotel & Casino. “There’s a big opportunity for us to leverage our resources better.
“The concept we’ve developed is sound, the cost basis is excellent. The education to owners and (helping) them understand this is system wide for everyone to benefit from rising tide. There are still opportunities to improve on it.”
He said leveraging more from partnerships to enhance the instant perks awarded as part of the Hello Rewards program is a primary way to improve it. Bill Linehan, EVP and chief marketing officer, said the instant perk program—in which guests receive a perk each time they stay and receive a free night after seven stays—is a big differentiator for RLHC.
“The other programs are point-based programs with published tiers,” Linehan said. “Ours is a perk program.”
The program has nearly doubled its membership in the last year—much of which can be credited to the company’s partnership with Expedia, Linehan said.
The company is happy with its relationship with online travel agencies and plans to expand its partnerships in that area, Mount said.
“A large amount of the growth we’re seeing comes from Expedia, and we’re going to be extending that to similar OTAs in the near future,” he said.
Linehan said 99% of travel is influenced by online channels, so it makes sense to partner with OTAs.
“It’s another step in their stay,” Linehan said. “Recognizing these channels as mass-merchant marketplaces is what we need to do. It only makes sense for us to have strong relationships with them.”
There are some learning curves involved in such relationships, according to Mount.
“When you think about the cost of acquiring a customer that way, we need to figure out a better way to monetize that,” he said. “If we can turn them into a long-term customer of the brand, it does help offset that cost.”
A new franchising platform
The company is also moving online in some of its franchising platforms in an effort to become more efficient, the executives said.
Mount called the unveiling of franchiseasy.com “one of the most significant things that we announced” because it allows owners to secure information easily and actually sign up for a franchise without the need of a salesperson.
“It is a way for entry-level owner to have economical way to get demand generated in their hotel,” Mount said.
The franchiseasy.com model is straightforward in that the 4% fee includes property management, reservations management and all operational aspects delivered from the cloud. Mount said the cloud aspect of the program provides the company with a lot more flexibility to expand—including outside of North America.
“We’re starting to see a way where our branding—I’m not going to use the word franchising—provides us with an opportunity to be borderless,” he said. “We don’t need to have boots on the ground.”
RLHC’s Country Hearth Inns & Suites brand is the incubator for the franchiseasy.com platform—owners can choose to brand their properties under the Country Hearth name or keep their existing independent status by making the fees be transaction-based.
“They can use the brand or not use the brand, we deliver everything via the cloud,” Mount said. “Instead of charging them a franchise fee we charge them a transaction fee every time the room is consumed.”
The company has “no preference” on which option the owner takes, the CEO added.
Linehan stressed that the concept is not a soft brand.
“They choose to be Country Hearth or independent,” Linehan said.
The franchiseasy.com model complements RLHC’s commitment to being asset-light and focusing on fee-based revenue, Mount said, adding that when he joined the company nearly five years ago, 3% of its revenue came through franchising. That number is now 60%.
“We’ve been on a path and trajectory that’s been ahead of schedule,” Mount said. “The last real long tail was the stratification of the brand—that’s the last thing we need to accomplish, and we need to start focusing on helping our weakest links become successful, quality experiences.”