Contributed by Estella Hale, Chief Product Evangelist, SHR
When it comes to making revenue strategy decisions for your hotel business, not only can it be confusing, but there may still be a tendency to want to cling to familiar methods, including legacy technologies. No one knows this better than Greg Mount, President and CEO of Red Lion Hotel (RLH) Corporation. Arriving on the scene in January of 2014, Greg’s team inherited a hotel business that was arguably on the verge of irrelevancy. Since then, they have literally reinvented themselves to now be one of the largest and most successful hospitality companies in the country. “We took a 40-year old brand with 55 hotels in eight states, and repositioned it to almost 1,500 hotels all throughout North America,” Greg said. “For us to do this meant taking the opportunity to find out where we could leverage our brand and really compete.” How did they do it? On a recent podcast, we took a look at the company’s evolution, their use of the RLH RevPak, and how their vision can help other hoteliers who find themselves in the same tough spots in their own markets.It’s been a long road for RLH, and the first step was understanding changes in the market and being honest about who and where they were as a brand. “We knew we would never have the ubiquity to compete with the bigger brands that relied heavily on loyalty programs. So, we felt that our ability to succeed would fall squarely in technology and innovation, and adapting to what we were seeing out there, including what the OTAs, Google, and Amazon were doing,” Greg said. He used the example of our “free” Gmail accounts that we have all enjoyed for the last ten years or so, perhaps not realizing that Google has been spending all that time aggregating the data they’ve been collecting on all of us that they’ll now use to deliver goods and services, including hotel rooms. “Instead of getting a list of 100 hotels like you get now, you’d receive a small list selected just for you,” he said. “We figured out that with this kind of tech emerging, it pointed to a future where a company like RLH wasn’t going to have to expend as many resources compared to a larger hotel company to get shelf space.”
But there was a snag. “When we were looking at where we wanted to go, we still had the typical legacy systems that many hotels had had for decades. We were all trying to append and adapt those bulky mainframes, which is really a massive competitive disadvantage,” Greg explained. “We figured out that the better strategy would be to bring on the best in class SaaS available, set up a platform with those systems to work together, and let them do the constant system updates on their own.” This is how RLH RevPak was born. Defined, it’s their integrated platform of custom applications designed to provide a single view of all RLH customers, incorporating CRS, CRO, PMS, CRM, plus content management, web operations, internet marketing services, field marketing, and new business intelligence. RevPak has freed up RLH’s intellectual resources and efforts for other areas, helping their hoteliers to achieve more guest bookings, create of a sense of ownership when guests are on site, and extend that relationship to keep them booking over and over again.
RLH is also rolling out their new website using Drupal. “This platform is allowing us to bring forward the next evolution of RLH, and a booking experience that most of the industry has not seen yet in the core brands,” Greg explained. “For instance, you could literally be driving to your grandma’s house, then get on your phone, go to our site, our site picks up your location, you tell it where you’re going, and it will map out a collection of hotels along your route plus prices. It’s really amazing.”
For us at SHR, this is a perfect illustration of what we talk a lot about; the importance of meeting your guest where they are as unique visitors. This kind of forward thinking also allows hoteliers and franchisees to do their jobs much more effectively, which benefits them and the guests on an entirely new level.
As for data and analytics, Greg’s group is moving forward there as well. “We’ve been working on ensuring that we can capture a lot of data in a meaningful way, but then also provide the analytics of that data to every level of our organization to be able to look at what’s really happening in our markets,” he said. “For instance, with the help of companies like SHR, we can now gather info to make revenue management decisions for our economy brands in real-time. And we just did another program to help us reconcile the fees we pay to OTAs, which helps our franchisees to see what’s going on.”
We discussed this in our first podcast on distribution; the idea that there are many other attributes that must be taken into consideration when looking at true costs, such as Net RevPAR. Everything is shifting with new data that is coming in, plus we need to look at other things that all add up to bringing hoteliers a relevant guest and offers that are relevant to that guest. “Part of what we are able to do now is get info in a nanosecond from a person’s phone. zip codes, location, etc., and we can make pricing decisions based on that,” Greg explained. “These deeper dives are why we need partners like SHR for who can provide relevant guest data, like what cities they might be going through, what room types they might have been reading about, all to create profiles that can really serve up something of value.” This strategy has allowed RLH to go far beyond the Red Lion image, and spread out into new markets like Hotel RL, Signature Inn, and more.
The bottom line? RLH has created a best-in-class experience for their hoteliers and for their guests which keeps evolving, and this is a good thing. “The landscape is changing very quickly, so none of us want to be caught out. Everyone is in the same boat trying to figure out where we’re going to be in 5 or 10 years,” Greg explained. “This is why you need to have partners like SHR who are thinking far ahead about how hotels will need to adapt. We may make some mistakes along the way, but we will all win if we are willing to make the necessary investments to serve our people, our guests, and our brands.”
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