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Skift Q&A: Why Red Lion Hotels’ Rebrand Is All About Local

@gregoates

Feb 05, 2014 9:40 am

Skift Take

While the localism theme is becoming common today in hospitality, few hotel groups have circled their brand wagons around local community integration as enthusiastically as Red Lion Hotels.

— Greg Oates

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As CEO of the Spokane Convention & Visitors Bureau until 2010, Harry Sladich was widely credited for raising tourism numbers to the previously ignored city. Spokane-based Red Lion Hotels hired him that year as executive VP of sales, marketing and distribution to do the same thing for the company’s 50+ hotels spread across the Western states.

Using his expertise in destination branding, Sladich has been working for the last two years on a Red Lion corporate-wide initiative called “Local. Wise.” It’s designed to integrate the hotels into their communities by partnering with area attractions and small businesses to give guests a more local experience. The hotel staffs are also taking an active role in the success of the program.

Localism, of course, is not a new thing today in the global hospitality industry, but it certainly was in 2011 for Red Lion Hotels. And few, if any, hotel groups have completely rebranded their company vision around the local theme.

Since 2011, Red Lion has been divesting non-strategic properties, purchasing previously leased properties, upgrading product and restructuring debt to solidify shareholder value coming out of the recession. Pipeline development plans include 20 new franchises anticipated in 2014, with possible expansion east to cities like Chicago and Atlanta.

At the same time, everyone in Spokane HQ knew that it was going to take more than product enhancements to differentiate Red Lion in the midscale hotel segment.

So Sladich and his in-house IT team started brainstorming with TravelClick to create an entirely new web platform with personalized websites for every hotel, offering indepth, integrated destination information. The new design features animated homepages with rollover functionality to promote specific things to see and do as decided by the individual hotel.

There are Google Maps with embedded local bars, restaurants and shops chosen by the local hotel staff. The sites also feature a nifty shopping cart where consumers can purchase upgrades, packages and add-on amenities. This is especially powerful for companies booking meetings at Red Lion who now have the option to personalize each attendee’s stay.

The fully responsive Red Lion website network is expected to be completed at the end of this month, ending phase one of Local. Wise. Phases two and three are reworking the guest experience on- and off-property.

According to Sladich, this wasn’t always an easy sell during the process. Some of the board directors were nervous about investing further in the local theme, unsure of the ROI. So Sladich gave a presentation to the board that included references to the October 2013 Skift Trend report, “The Rise of Local in Hospitality.”

“This was such a departure from the norm that it was scary to some people, I think, a little,” recounts Sladich. “Your white paper and examples gave me the ammunition to say, ‘Guys, it’s already occurring.’ I said look at this, people are trying to bite off parts of this all around us, but we can deliver it more comprehensively than anyone else. This is what’s going to be the differentiator for our shareholders and employees.”

We spoke at length with Sladich about the development of Local. Wise., and its success to date with regard to the surprising jump in direct bookings.

Skift: How did this rebranding around local begin?

Harry Sladich: Red Lion Hotels is an iconic brand in the West, and we’ve been around a long time and a lot of people know who we are, but quite frankly the brand had lost its relevancy to some degree. People knew what it was but they didn’t know what it stood for, so that’s why we moved in this direction to create something we felt we could own and deliver on.

The two Red Lion brand pillars are really friendly service and locally inspired. Friendly service is so over-used, and I certainly understand that. What we did is we went out and did some research with clients and potential clients, and we asked them what we did well and what we did not so well.

Overwhelmingly, they all said the staff was friendly. So the locally inspired is really what we’ve been talking about and what your white paper addressed. And that is, Red Lion Hotels are a gateway into the community, and they’re going to offer the experiences that people are desperately after. It’s about making more of an emotional connection than just touting a brand standard like a bed or showerhead or a soap.

Skift: Is the website the bulk of the Local. Wise. initiative?

Harry Sladich: The website is just the tip of the iceberg as far as the deliverables. The promise that we’re going to provide insight into the local area is delivered when a guest arrives at the property through many other touch points. It’s going to be our culture as we move forward. We’re bringing that to a level that I don’t think anyone else is doing. It’s exciting but it’s also fragile because if the associates don’t deliver this, then we’re in trouble.

Skift: What were your priorities for the website design?

Harry Sladich: The website had a static conversion rate and it languished at a very low number for a very long time, which meant the website wasn’t working. And the traffic coming through the online travel agencies was just excessive. So when we went to look at the website, we asked ourselves what is the promise that we can put on there?

I’m fortunate to sit on the board of the US Travel Association, where we watched a live focus group tell us the pains of travel and what they want. And they all said they wanted an experience, they wanted a memory, they wanted to come back with a story. They said that hotels were becoming homogenized, a marble floor is a marble floor, and the whole idea of standardization was backfiring.

So we partnered with TravelClick to come up with a really innovative landing page that was going to deliver on one of our pillars, which is Local. Wise. It was enough of a difference where you said, “Wow, it’s really hard to compare.” And if our rate is equal or lower, then we could win that business. We knew that we had to provide something relevant, something interesting. That is: experiences, memories and stories.

Skift: So how are the numbers?

Harry Sladich: Our conversion rate has more than doubled since the launch of the new web platform. And I tell you, our cross-device usage has just exploded with smartphones and tablets taking up a stronger percentage of the mix.

So, we’re delighted. Not only is the content cutting edge, and we think relevant and connects on an emotional level, but it also displays on the proper device, and that’s critical. We also have a lowest rate guarantee, so if you’re a member of our loyalty program, we can guarantee you 15% lower than any other rate, which is unusual in the industry because most of the time you have to give parity with the OTAs.

Skift: How did you manage that?

Harry Sladich: Because we negotiated a deal with them that said, if you’re a member of our loyalty program, and you sign in under that loyalty program, we can then display a rate that is lower than anywhere else. We don’t feel like OTAs are the villain. We just don’t think hotels manage the relationship properly. We will always need online travel agents, and they’re good partners of ours. I just want them to have their fair share, and I want to get my fair share. And my fair share better be larger than theirs.

But channel migration is key. If I can get people to book on my website and book through my channel, I can get them as a customer and have them return, and make sure they book through our channel again, versus booking through a third party.

Last year, we looked at some industry benchmarks, and we said in three years we’d like to get to these certain benchmarks. If we did that, than this will have been successful. Over the last four months, we’re almost going to hit those goals already.

Skift: Can you talk a little about the shopping cart?

Harry Sladich: The shopping cart idea is something that people haven’t done that much in the industry, although it’s certainly everywhere else. You put your stuff in the cart, you view your cart, and you check out. And if they abandon the cart, we have software to go find them and see if they’ll come back to their cart. So it’s very intuitive, it’s very easy, and that’s what we wanted.

The beauty of it, our in-house team here in Spokane, Washington came up with it. Our friends at TravelClick have been an immense help to us, but when they heard that we were going to do this ourselves, as any good partner would ask, (laughing) they said, “Are you sure?”

Skift: What was the process behind securing content for the websites?

Harry Sladich: We sent out three assignments to all of the hotels last summer and we asked things like: What are you known for, what’s the quirkiest place, what’s the most interesting things to do, what is the seediest place, etc. You know, I want the good, the bad and the ugly. They sent up here to corporate all of these assignments and then we went through it and picked out the stuff that we thought was really cool.

And then that’s how we did the design based on their input. So the franchisers were very happy about this because it wasn’t corporate saying this is what your site is going to look like. And they can sell the site better because they were involved in the process of creating it. There’s still some things to work on. I want much more description about what makes the places cool and why people should go.

If you click on the map, and you look at the restaurants or shops, it’s going to say “Staff Picks,” and the only restaurants that are going to be populated are the ones that the team felt are really local and genuine. So you’re not going to have Applebee’s or Olive Garden—nothing wrong with Applebee’s and Olive Garden—but that’s not local. That’s not what we’re trying to do. And then it’s going to be seasonal also, so we’ll be updating information about things relative to the time of year.

Skift: What are some of the initiatives at the hotel level?

Harry Sladich: We’re bringing back our manager’s cocktail reception, and we have tested using chalkboards in the lobbies, where people can recommend restaurants, for example. It’s a great experience for single travelers, because it sparks conversation really easily.

With the van that picks up guests, it’s completely plastered with things to do and places to go that are totally pure to the destination. And then when you check in, Emily at the front desk will have a name tag that says, “Emily. Ask me where the best martini is.” And Joe next to her will have one that says, “Ask me where I like to hike.”

So what we’ve done is to ask each associate to know one thing that they like to do really well, and be an expert at that. So when the guest is engaging with them and says, “Okay Emily, I’ll bite, where is the best martini?” she’ll be able to give expert advice on the subject.

We’re also creating something called a Certified Localist, and we’re putting together a test right now based on the information that the hotels sent up to us. So each associate who wants to be a Certified Localist will take this test, and then they’re allowed to talk in a much more broader level about the community. And we’re going to give them a stipend in their pay.

Skift: What has been some of the feedback so far around these initiatives?

Harry Sladich: The guests absolutely love it because people are becoming very suspicious of the traditional concierge. They think there’s a kickback, and they want the genuine, real stuff instead. So we’re going to share everything we can online and on-property, from a nightclub in a part of town that you might previously have been worried about, to the coolest family attraction. Our guests want all of those experiences.

All of the menus are changing. There’s a certain percentage of local beers, wine and food that have to be in the template. And people are responding really well to that also. We’ve got our bread and butter customer who is the Baby Boomer certainly, but there’s the Millennials who want an emotional connection. They want to explore. The hotel has got a be clean, they have to have the technology in the rooms, which we have, but they also want to go to six bars in one night.

But what we’re finding is it really doesn’t depend on age as much as we thought. You can be 60 years old and still want to go to some crazy nightclub. The important thing is, the communities here are on fire about how the hotels are engaging the local businesses in town. I mean, talk about another sense of loyalty, one with the very community we live in.

Greg Oates covers hospitality and tourism trends. He’s toured over 1,000 hotels in 50+ countries.

Follow @gregoates

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