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Importance Of Integration

Red Lion CEO Mount Offers Update On Vantage, Overall Growth Plans

Wednesday, January 04, 2017
Dennis Nessler
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Hotel Interactive® caught up with Red Lion Hotel Corporation (RLHC) President and CEO Greg Mount as the New Year began and on the heels of last month’s annual conference for Vantage Hospitality Group, which was acquired by RLHC in October. Mount addressed a number of topics, including the ongoing integration of Vantage into RLHC as well as the company’s unique deal with Expedia, during this Q&A.

HI: What was the primary objective of the recent Vantage conference?

GM: “The focus of the event was really to bring the two organizations together and help the Vantage franchisees understand that for them it’s status quo as it relates to how business has been conducted and their agreements with the organization. We spent time helping them understand the benefits that they’re going to see over the course of time as integration occurs from the technology and innovation side of it, but also to the online, ecommerce and digital marketing that they’re going to benefit from as well as, in some cases, fairly significantly reducing their reservations expenses.

“The focus of it was really to introduce them to RLHC, answers any questions that they had, and, most importantly, it was to show them [former Vantage CEO] Roger [Bloss]and [former Vantage COO] Bernie [Moyle] have an integral part in the organization going forward and that they’re still here and active and available to them.”

HI: How has the integration of Vantage gone thus far?

GM: “We learned a lot of valuable lessons with the smaller one we did with Guesthouse. From a standpoint of moving forward, we expect to be completed with the transition by June of 2017. We’ve already started to move their platforms over to ours, which will help facilitate the integration as we work forward. We’ll always have little bumps as we go through these integrations, but the advance teams on this did a really great job both internally and externally. We had roughly 25 to 30 regional meetings throughout the U.S. where we brought in all the franchisees to talk to them about the acquisition and to answer any questions at that point as well and I think that worked to really help with the transition.”

HI: How do you see the RLHC brand portfolio taking shape following the acquisition of Vantage and all of its flags?

GM: “We’re really going through that stratification process as we speak and the direction we gave at the conference was that we’re going to take a long look at it. In instances where we have brands like 3 Palms and there are less than a handful of properties, we’re obviously not going to look to grow that. We’ll look to try and find another home for those hotels within the other brands that we have. I don’t think it makes sense for us to support all of the brands that we acquired in this acquisition. The bulk of it is Americas Best Value Inn, and it kind of falls off from there. We’re taking a real hard look at it, looking both short and long term, where we want to be and what kind of brand tree we want to have going forward. That process is going on right now and we’re committed to have it resolved by the end of the first quarter.”

HI: National expansion has been a major initiative for the company, and specifically its Red Lion brand, how has that progressed?

GM: “That growth is going very well. We’re actually seeing some real excitement, and have executed some additional deals based on the Vantage transaction. We ended up with about 30 hotels in Canada. This now allows us to have a foothold up there so we can bring our heritage Red Lion brand up into Canada, which we will start to do. I think overall we’re feeling very good about it and the U.S extension east of the Mississippi has gone very well. Our guidance this year was for 25 to 35 and we’re on pace for that.”

HI: Can you update the progress of the company’s lifestyle brand, Hotel RL, which was launched roughly two years ago?

GM: “We have five open now, and a couple opening in the first quarter. Having 11 executed deals in about a year-and-a-half we feel really good about it. The pipeline is very active, there’s a lot of interest around the brand. I think our feeling all along was based on past experiences that we’ve had in prior lives, if we can get to 20 or 25 hotels in the first two to three years that’s a really good base to grow from and would be a significant achievement.”

HI: In 2016 the company forged a partnership with Expedia to offer its customers discounted rates? Can you talk about what prompted that deal and how that’s working out thus far?

GM: “It continues to pay dividends with us and really has been significantly successful not only from a demand standpoint but also from a customer acquisition standpoint.

“We really looked at the landscape and approximately 52 percent of all reservations in the U.S. are booked through the OTAs. Whether you like it or not, it’s a marketplace and you can’t ignore it. I don’t know if people have figured out that the people who are picking up the tab are the franchisees, not the hotel companies, and so we looked at it and said there’s got to be a better way.

“For us it provided two key things; it moved us up to where all our hotels are predominantly on the first page and worst case on the second page, which is pretty significant. Also we now have some of the largest OTA systems out there marketing our brand for us and they’re spending billions of dollars to do so…We took advantage of the me-too attitude that was out there and people kind of blindly following along versus really looking at what it is they’re dealing with and understanding how can we actually take advantage of the situation.

HI: What are your primary goals for the company for 2017?

GM: “We just completed another raise at the end of year so we’re going to continue to look for other acquisition opportunities that may or may not exist. We’ll work to integrate the Vantage hotels, brands and systems into ours and really leverage what now places us probably in the top 10 in terms of hotels. We have a secure foothold in the economy segment, our focus in 2017 is really growing our upscale and midscale systems and I think with the ubiquity we have now we’re feeling very confident we’re going to be able to do that. Lastly, focusing on introducing technology there are some things we’re going to bringing out here in the first quarter that will be looked upon maybe in the same light as what we did with Expedia. Once people figure out what we’re doing it’s really going to be pretty revolutionary.”
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Dennis Nessler    Dennis Nessler
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