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Capitalizing on the popularity of extended stay brands with midscale hotel chains, Columbus, Ohio-based Red Roof is adding to its portfolio HomeTowne Studios by Red Roof, and in some instances, HomeTowne Suites by Red Roof.
If HomeTowne sounds familiar, that’s because it’s an existing extended stay brand that is owned by an investor group that’s led by Red Roof’s owner, Westmont Hospitality Group.
To launch the new sub-brand HomeTowne Studios by Red Roof, the company plans to initially spend more than $50 million to convert more than 30 existing hotel properties in 20 markets, compiling nearly 4,000 rooms, some of which are hotels that are owned by Westmont and other investors. This is Red Roof’s first foray into extended stay.
“There are a few HomeTowne hotels that currently exist, but they’re in the Westmont Hospitality family,” Red Roof President Andrew Alexander told Skift. “But now they are getting the Red Roof branding and the HomeTowne brand is now affiliated with Red Roof.”
Alexander added, “Many of those properties are currently branded under Crossland Studios, many of those hotels which were previously part of the Extended Stay America family. Part of that asset group will become HomeTowne Studios by Red Roof. They’re rebranding from Crossland to HomeTowne.”
The shared official website for Crossland and HomeTowne says there are more than 60 hotels for each brand in existence throughout the U.S. Alexander could not confirm if those numbers were accurate. He did however, note, that some of the first HomeTowne Studios by Red Roof properties to open by the end of this year would be rebrands and conversions of those hotels.
Alexander also emphasized that Red Roof, Crossland, and HomeTowne, are separate brands and entities, and that Red Roof is “not affiliated with Crossland or HomeTowne.” The only common thread among the three brands is Westmont Hospitality Group: Westmont owns Red Roof, and it’s a lead investor in Crossland and HomeTowne.
“It is a new brand extension for Red Roof; for us, it’s a new brand,” Marina MacDonald, chief marketing officer for Red Roof told Skift.
Red Roof plans to grow the HomeTowne Studios by Red Roof brand under its portfolio through franchise agreements. Its other brands include Red Roof Inn, Red Roof PLUS+, and The Red Collection and in total, the company has more than 550 properties in the U.S., Brazil, and Japan.
Extended Stay Continues to Grow
“The extended stay category continues to grow as consumer preferences continue to evolve,” Andrew Alexander, the president of Red Roof said in a statement. “The launch of HomeTowne Studios by Red Roof is a natural progression, and key milestone, as we extend our portfolio for a range of guests, leveraging our solid industry reputation for knowing what guests want and fulfilling those needs with a full fleet of offerings, now including extended stay.”
The extended stay hotel segment continues to do well. The Highland Group, a hospitality-focused consulting group, noted that occupancy and average daily rates for extended stay hotels in the U.S. rose in the second quarter of this year, despite the addition of 30,000 new rooms. Revenue per available room (RevPAR) for extended stay hotels grew 4.4 percent in the second quarter of 2018 compared to the same period last year.
“Extended-stay hotel occupancy above its long-term average and the strongest demand growth trend since the post-recession recovery provide a solid foundation to absorb the record number of new rooms under construction,” said Mark Skinner, partner at The Highland Group.
With HomeTowne, in particular, Red Roof hopes to attract local residents, project-based job industry workers, business travelers, and families.
Extended stay brands have increasingly become a sector of choice for a number of hospitality companies, including Choice Hotels, which recently closed its acquisition of economy extended stay brand WoodSpring Suites.
Additionally, brands already within the space are evolving to meet the needs of new generations of travelers to be more communal and, in some ways, responding the growth in popularity of Airbnb. Examples include Marriott’s Element brand and Extended Stay America.
Red Roof noted that HomeTowne hotels will offer a number of home-like amenities that include a kitchenette, full-size refrigerator, microwave, 24-hour laundry facilities, and complimentary coffee in the lobby every morning. The company’s press statement on the new brand did not note any special programming or an emphasis on communal living.
Red Roof’s description of the HomeTowne brand, however, most similarly resembles that of another popular economy/midscale extended stay brand, MyPlace Hotels, which primarily invests funds into its guestrooms, and not necessarily shared lobby or other public areas. It also has a franchisee model.