LOS ANGELES — In a tight labor environment in which operational efficiences are essential, Red Roof is betting big on its HomeTowne Studios by Red Roof extended-stay product.
Red Roof first launched the HomeTowne Studios brand in 2018 with the purpose of offering a convenient, cost-effective and comfortable accommodation that benefits both franchise partners and guests. Then, in 2021, it revealed an upgraded prototype, which helped alleviate some supply-chain constraints, said Red Roof Chief Development Officer Matthew Hostetler during a video interview with Hotel News Now at the 2023 Americas Lodging Investment Summit.
The overall goal of the revamped prototype, he said, was to "focus on the developer, the owner ... making sure that they get the best bang for their dollar to build that hotel."
Red Roof broke ground on its first new-construction HomeTowne Studios in Bradenton, Florida, in 2022.
"That particular developer also signed five total franchise agreements, so the second one is actually in the ground as well," he said.
Expanding on the HomeTowne Studios brand, Red Roof in 2022 also unveiled a new-build, dual-brand prototype that combines the Red Roof and HomeTowne Studios brands under one roof.
Hostetler said the new dual-brand prototype features 150 rooms, "which gives you the operational benefits of a transient hotel and also the extended-stay."
"You get a lot of operational expertise on both sides to have a lot of that revenue drop to the bottom line," he added. "And today, we're in an industry where labor's an issue. So you get to share the labor back and forth; everything is in one central reservation system."
The dual-brand already has some conversions that are open and operating, he said, as well as a signed agreement for a new-build in Salisbury, North Carolina.
How Challenging is Development Now?
Despite macroeconomic challenges, Hostetler said there are savvy developers and investors out there now.
"They know; they've been through downturns before," he said. "They keep their nose to the grindstone. What we do is we focus on those [individuals] and continue to keep our nose to the grindstone as well."
He said he expects there will be a positive uptick in selling franchises across all Red Roof brands both in terms of new construction and conversions.
For more from HNN's conversation with Matthew Hostetler, watch the video above.