RLH Corp.: Fewer brands, mobile franchising

LAS VEGAS — What gives Greg Mount, president and CEO of RLH Corp., goosebumps?  It's a new approach to franchising that allows owners to make a deal using their mobile phones.

Greg Mount, president and CEO, RLH Corp.

Greg Mount, president and CEO, RLH Corp.

By Colleen Isherwood, Editor

LAS VEGAS — What gives Greg Mount, president and CEO of RLH Corp. (Red Lion Hotels), goosebumps?  It's a new approach to franchising that allows owners to make a deal using their mobile phones. And while most hotel companies are adding new brands, Mount plans to reduce RLH's brand total from 13 to nine by the end of next year. 

These and other announcements took place at the brand's annual conference, held at the Hard Rock Hotel in Las Vegas this week. It's been just over a year since Red Lion, which then had 113 properties, took over Vantage Hospitality, which was at least nine times its size. In Canada, they have about 27 Canadas Best Value Inns and two Lexington Hotels. The total count for the hotel group is 1,100 properties, mostly in North America.

Here are some of the highlights.

The four brands affected by RLH's move account for about 60 hotels and include Lexington, 3 Palms, America's Best Hotels and Jameson Inns. Canada has Lexingtons in Windsor, Ont., and Sudbury, Ont. The nine remaining brands are Canadas Best Value Inn, Americas Best Value Inn, Signature Inn, GuestHouse Inn, Red Lion Hotels, Red Lion Inn & Suites, Hotel RL, Settle Inn and Country Hearth Inn & Suites.

“We will be providing on a cost neutral basis the opportunity to move to one of our other brands,” said Mount. “We will continue to support them until the end of their contract. They can still stay on the system and still call themselves by that name.  We want to make this seamless and neutral.”

“The biggest benefit is an aligned market,” said Bill Linehan, EVP and chief marketing officer. “Three Palms had only three hotels. We wanted to align with our other brands.” The Lexingtons could switch to Hotel RL, which is designed to be a conversion brand, Linehan added.

Other innovations were unveiled at the conference.

Franchise Easy, a mobile platform that allows owners to secure their franchises online, is an innovation that gets Mount excited. Using the mobile franchising platform, franchisees can join the Country Hearth brand or remain independent, but they can get the reservations, distribution and channel management and the deals RLH has negotiated with the OTAs. 

“The Country Hearth brand is an incubator,” said Mount. “It can be a platform for other brands.  It can also be transactional based, and delivered via The Cloud.”  This eliminates the need for a franchise in markets, such as China, where franchising doesn't necessarily work.

But, adds Mount, it's not a soft brand.

Apple TV, Hello Rewards and Auto-Save

Red Lion is conducting a pilot with Apple TV, using a system that allows any television to be easily converted so guests can put up their own content. “We worked with Apple to design Apple TV remotely integrating Red Lion TV showing a live newscast,” said Mount.

RLH Corp.'s rewards program, Hello Rewards, has almost doubled in size over the past year. It's a simple system — seven nights stay nets the guest a free night. “Loyalty program points-based systems are expensive and cumbersome,” said Mount. Using this simple system, “You can eliminate two thirds of what you normally spend.” 

Unlike most loyalty programs, it's not paid for by the hoteliers, said Linehan. “It's funded within the program — it's a means for customer acquisition.”

Leslee Torres, recently hired as SVP responsible for digital, loyalty and partnerships, also introduced Auto-Save, a new agreement with Expedia that automates recalculation of fees. She said that one quarter of reservations are modified by the time the guest checks out, a trend that will continue to grow. Keeping track of those changes is a difficult process, and Red Lion is providing hoteliers with a system to manage it, making sure that they are getting every dollar them are due. Mount says about 5 per cent of revenue from Expedia bookings is currently being lost.

“It's a home run for operators,” said Harry Sladich, serves as EVP hotel operations & sales. 

Mount stressed that RLH has delivered on the commitments it made at last year's conference, held a few months after it took over Vantage Hospitality. They talked about 17 per cent revenue growth, and have accomplished that. They have reduced the fees paid to Expedia from 22 per cent to 18 per cent. They are ahead of schedule in stratification of their brands. And they are selling the bulk of their owned real estate, a move that will enhance the cash position of the company.

Mount said he's always looking for acquisitions. “We're focused on midscale and upscale. We will have no more acquisitions in the economy sector. We have really done a good job integrating [the Vantage] groups — it's been pretty seamless. We're on a growth trajectory that will be both organic and acquisitions. We're strictly in North America and looking at the smaller, regional systems. We are a good fit for them.

“If we find the right upper upscale acquisition, we'll add that to the plan!”