RLHC extends franchise options with extended-stay brand
RLHC extends franchise options with extended-stay brand
14 OCTOBER 2020 8:11 AM

During the company’s online conference, RLH Corporation executives announced the relaunch of GuestHouse Extended-Stay, a brand the company acquired in 2015 as GuestHouse International.

DENVER—RLH Corporation’s plan to grow and strengthen its position post-pandemic is focused on engaging its franchisees and providing support, flexibility and options.

Those options include a conversion-friendly extended-stay brand, GuestHouse, which the company relaunched during its virtual conference this week. The brand also is suited for new-build hotel projects and will be a key part of RLHC’s strategy to continue to grow its pipeline and portfolio.

RLH acquired GuestHouse International in 2015 for $8.5 million, which added 73 properties, some under the Settle Inn brand. Relaunched as GuestHouse Extended Stay, at least 10% of hotels across the brand will be required to have full kitchens, and the rest will include modified kitchenettes.

During the company’s virtual conference, Harry Sladich, RLHC’s EVP of lodging development and franchise operations, said “extended-stay properties fared very well during the pandemic, and we feel this segment will continue to do well as it’s underrepresented in many markets.”

Harry Sladich, EVP of lodging development and franchise operations at RLH Corporation, speaks during the company’s online brand conference. (Screen capture: Robert McCune)

In a company news release announcing the relaunch, John Russell, CEO of RLH Corporation, said: “Despite the extraordinary drop in travel demand our industry is experiencing due to the pandemic, one hotel segment continues to perform significantly better under pressure, and that is extended stay. We had a major opportunity to transform our GuestHouse brand into an upper-economy, extended-stay model set up for future success due to the resilient nature of the segment.”

The reinvented brand concept for GuestHouse features “streamlined housekeeping services, community-centric guest amenities and right-sized brand standards designed to maximize owner return on investment,” according to the release, and development focus will center on “communities where the extended-stay product is underrepresented, particularly within major metropolitan areas.”

The offering is expected to help boost franchise sales, which were “record-breaking” in the first quarter of 2020 but slowed with the onset of the COVID-19 pandemic, Russell said during the online conference. Despite the slowdown, the company still plans to “onboard 34 hotels this year,” he noted.

Sladich said “this new brand offering will add to the continued growth of our footprint, and I’m happy to say that we have several new-build deals underway.”

He added that RLHC’s portfolio has outperformed competitors in its segments through the pandemic.

“We’re starting to see trends normalized to last year, and in fact, some of our hotels have said they’re beating the previous year for the month of September. We’re encouraged by these trends and know we have a long road ahead of us,” he said.

Properties exiting RLHC’s system have also decreased, down 22%, Sladich said.

“With a record number of new franchise licensing agreements being signed, our pipeline has never been bigger, and we have a team to really move the needle as we move into 2021,” he said.

As the company grows, it’s also focused on uniting its eight brands, said Chris Trick, who was appointed as RLHC’s chief marketing officer on 15 September.

“We have a significant opportunity to create a red thread to unleash the collective power and strengthen the connection between our family of brands,” he said, noting this strategic effort will include the launch of a new website early next year.

“Importantly this strategic approach allows us to raise brand awareness to improve the perception and consideration of our brands, and to increase customer loyalty,” he said.

In addition to marketing support, RLHC is working to leverage its collective buying power with online travel agencies and to bring more properties onto its revenue management system, currently used by more than 120 hotels, Trick said.

Another major effort focused on helping owners is a “comprehensive review of every single fee that is currently in place or scheduled to start in 2020, with the intent of ensuring that all our fees are within industry benchmarks and have value,” Russell said.

“If they don’t (have value), they will be eliminated,” he said.

Staff training also is a priority, Sladich said, noting that participation in the company’s online curriculum, Red Lion University, grew from about 70 when the program launched in the fall of 2019 to 423 owners enrolled through August 2020.

He said feedback from owners has been positive and will continue to be sought as the company resumes its “town hall” visits to properties this year.

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