Wheeling and Dealing
Red Roof Inn's recent sale could be seen as a huge challenge for the newly independent company. Instead, CEO Joe Wheeling looks at it as an incredible opportunity, and he couldn't be more excited about the future.
“It's like we're a $1.3-billion startup company with the advantages of starting out with a strong brand, strong franchises, strong investors and a great group of employees,” he says.
In September, Accor sold Red Roof Inn to Citi's Global Special Situations Group and Westbridge Hospitality Fund for $1.313 billion. Two months later, Red Roof announced it would move its corporate headquarters from outside Dallas back to Columbus, OH, its home before the purchase by Accor in 1999.
Once the basics were out of the way, Wheeling says the focus shifted to three larger goals:
Growing the brand;
Creating a best-in-class IT system;
Strengthening Red Roof's position at the top of the economy segment.
With the strongest presence in the Midwest, Wheeling says there is plenty of room to expand west, specifically in California, and south.
“We have markets still available,” he says. “It starts with franchising and continues through company growth and acquisition. This is a brand that has tremendous opportunity and is committed to growth.”
Building a comprehensive IT system started in November when Red Roof Inn contracted Medallia for a new online guest satisfaction survey system. Wheeling says other upgrades will follow with the company's website and online content, as well as an improved PMS.
“We're about to take a really big leap forward from an IT standpoint,” Wheeling says, “really out of the necessity of the transaction and transition.”
The improved IT will go along with Red Roof Inn's nearly completed renovation initiative. The redesign was highlighted by its Smart by Design Amenities that included upgraded bedding (see story on pg. 50) and free gourmet coffee.
“We really targeted focused areas we felt could make the biggest bang for the buck,” Wheeling says. “We have seen some significant RevPAR premiums with our renovated properties.”
The continued improvements will help achieve the goals of growing and strengthening the brand. Franchisees won't have the support of a huge company like Accor behind them, but Wheeling is confident that Red Roof Inn's future is brighter than ever.
“Right now people are probably working harder than they have in a long time,” Wheeling says. “But at the same time, it's very exciting. Everyone can see what their impact is in the future of the company.”
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