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Red Roof Executives Expect Extended-Stay Hotel Boom To Continue

Company Launched New HomeTowne Studios Prototype
Red Roof announced a new prototype for its HomeTowne Studios by Red Roof brand. (Red Roof)
Red Roof announced a new prototype for its HomeTowne Studios by Red Roof brand. (Red Roof)
Hotel News Now
August 4, 2021 | 1:21 P.M.

LOS ANGELES — Demand for extended-stay hotels greatly outperformed other segments of the industry during the COVID-19 pandemic.

George Limbert, who took over as interim president of the Columbus, Ohio-based company in August, said his company was proof of that trend.

"We all know extended stay was the darling of 2020," he said, while speaking to HNN at the 2021 Americas Lodging Investment Summit.

As part of that focus on extended stay, Red Roof officials announced at the 2021 AAHOA Convention & Trade Show plans for a new prototype of the company's HomeTowne Studios by Red Roof brand.

"We really put pencil to paper and came up with a more operator-friendly and guest-friendly prototype," he said.

In a news release announcing the new prototype, Red Roof officials said the new prototype features "modern room design aesthetics, a cost-effective development footprint and a layout that sets new standards for improved operational efficiency."

Limbert said the company is focusing on investments that have a clear boost in guest satisfaction, pointing out how smart televisions in particular are a relatively inexpensive improvement with a clear return on investment.

"Just take television, right? So the sizes of televisions are getting bigger, and they're getting cheaper," he said. "It's an easy add-on amenity to the room that can enhance the experience of the guests. So we don't see a lot of pushback [from owners] when it comes to those anytime you can enhance the guest experience at lower the cost to the franchisee."

In response to continued staffing challenges across the industry, Limbert noted the new version of HomeTowne can run with only six employees.

"We've done things to make the hotel easier to accommodate the guests but also easier for the operations team," he said. "You double your front desk with laundry. The laundry room is right behind the front desk, so it makes it more efficient, and we all know labor is a huge issue for all hotels."

Rebound Expectations

Broadly across Red Roof's portfolio, Limbert said his company has seen a bounce back in 2021 driven by strong leisure demand, and he believes the company is poised to withstand any potential hiccups or dips in the recovery.

"We're a resilient brand," he said. "I am, of course, worried just like everybody else about any kind of variant or lockdown and those sorts of things. But we will pivot just like we did during COVID."

He said the "gray-collar or blue-collar" people who work on infrastructure projects like those attached to the legislature working through the U.S. Congress right now are particular sources of demand for Red Roof's hotels.

"We certainly have concerns, but we're better prepared now for a second go, if it happens," he said.

Limbert said he has every expectation the ongoing demand recovery will continue and he expects to see significant investor and developer demand to come for the remainder of 2021 and into 2022. The new HomeTowne Studios prototype is new-construction.

"Of course, our bread and butter has always been Red Roof. And we expect to see conversions to Red Roof to continue the way they have over the last seven or eight years," he said. "We're a Midwest brand. We have a great presence in the northeast and the southeast. But we're looking to expand to the West Coast."

Limbert said Red Roof still views itself mostly as a single-brand company, which are increasingly rare within the hotel industry as many of them are acquired and folded into larger companies with expansive brand portfolios. He said that isn't in the cards for Red Roof for the foreseeable future.

"We have no plans to sell at this time," he said. "Of course, under my leadership, operational efficiency, profit maximization, of course are all goals of mine. That makes you more attractive from a sale perspective. But there's nothing like that on the horizon."