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NextGen Prompts Positive Gains

When Red Roof launched its NextGen design for rebuilds and renovations last year, the company used extensive customer research and input from its franchise advisory board to develop a comprehensive plan that would appeal to today’s business and leisure traveler. Now that the NextGen design has been implemented into approximately 75 of the brand’s 345 properties throughout the United States, Red Roof is starting to see a bump in revenue and occupancy.

Andy Alexander, president of Red Roof Inn, expects the positive trend to continue into the foreseeable future.

“According to PKF and STR reports for the remainder of this year and next year, the economy lodging market is showing a RevPAR growth between 3.5 and 3.9 percent,” he says. “I anticipate that we’ll be significantly above those numbers with our renovated properties.”

Despite a tough economy, Red Roof has seen revenue increase almost 6 percent year on year and occupancy is up almost 2 percent in the last year. Individual properties that have converted to the new model have seen a sales lift of up to 10.6 percent.

The major components of the design plan focus on advanced technology, upgraded electronics, and home-inspired amenities. Guestrooms are designed with hardwood floors, spacious workstations, and bathroom features such as walk-in showers, vessel sinks, and granite countertops. Technology upgrades include flat-screen televisions, bedside power outlets, and auto sensing remote jack packs so guests can plug mobile devices into the in-room TV.

Red Roof expects to rollout an additional 80 NextGen renovations on the corporate-managed side and another 40 franchised properties with the new design by the end of the first quarter of 2013. Alexander believes that NextGen presents a unique value and opportunity for hotel owners and franchisees.

“There is a strong ROI with our NextGen design,” he says. “We value-engineered this product to a very significant extent. We think it is one of the lowest renovation packages in the economy segment. It’s certainly in the range that is affordable to franchisees.”

But the biggest benefit, according to Alexander, is how the amenities and boutique-inspired design of NextGen differentiate Red Roof from other economy brands in the market and put it on par with midscale properties.

“NextGen puts us in a class that is different than the rest of the economy segment,” he says. “It separates us because we’re providing a very unique product. What we’re finding is that the midscale traveler now sees no discernible difference between staying at a Red Roof Inn and a midscale property other than the fact that our prices are lower and our value is better.”

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