Red Roof Inn Tip the Scales: Brand Resources That Can Maximize

Red Roof Inn

Tip the Scales:Brand Resources That Can

Maximize Your Profits

Prepared by and republished with the express permission of Phil Hugh, Red Roof Inns and Suites

Disclaimer

AAHOA does not provide legal advice or representation to anyindividual persons or members. To the extent that thispresentation contains information about the law that is designedto help the recipient understand or address his or her own legalneeds, such information does not constitute legal advice orrepresentation by AAHOA. AAHOA goes to great lengths toensure the information it provides is accurate and useful, butstrongly recommends all persons and AAHOA members consultindependent counsel and obtain professional advice andrepresentation that is appropriate to their particular situations.

OUR PHILOSOPHY

THAT MEANSWE FOCUS ON…

Red Roof is totally focused on the success of ONE BRAND, not how many different brands we can locate on one corner.

We respect your Area Of Protection.

Every HOTELEvery CUSTOMEREvery FRANCHISEEEVERY DAY

From humble beginnings in Columbus, OH in 1973 to over 450 properties across the United States

. . . And Now Internationally

Brand Inn Growth

357 inns at 12/31/13

396 inns at 12/31/14

59 new franchise inns

442 inns at 12/31/15

50 new franchise inns

2008 = 342

RED ROOF FRANCHISEES APPROVE

Franchisees Approve Red Roof Service

Source: 2015 Franchisee Survey

are satisfied with their decision to partner with Red Roof

would consider Red Roof for an additional project

would recommend Red Roof to other hoteliers

Franchisees rank our Regional Vice Presidents of Operations as superior to the competition

Some of the most experienced in the businessAll former GM’s; most Red Roof GMs

Average over 15 years of experience

2015 Franchise Survey

said they were superior or significantly superior to competitive operational support teams

The Industry Approves

Hotel Management Magazine asked readers to vote for the top economy brand . . .

RED ROOF BY THE NUMBERS

One of the highest RevPAR Indexes in the Economy Segment*

*Quarterly RevPAR Economy Tract Index for Red Roof locations open and operating for at least 2 years and for all of 2015, Smith Travel Research. 340 properties.

High Overall Brand Contribution*

*The Brand Contribution is the percentage of room revenue generated for the Properties, the reservations for which were generated by the Red Roof Inn website, the Red Roof call center, group booking, National Sales, Global Distribution System (“GDS”), third party websites and reservations by RediCard

members booked directly with the Properties, year ending December 31, 2015., This is calculated by dividing the total room revenue generated by the

channels referenced above for the Properties by the total room revenue generated by all occupied rooms at the Properties.

National Sales

Dedicated national sales team driving revenue for all properties through business to business sales.

Represents 31.4% of all system revenues:

1:16 - Highest ratio of national/regional sales personnel per property of any national brand.

*December 2015

Sales Contribution

31.4%* COMBINED

PROPERTY DIRECT 10.2%

BRAND CHANNELS 21.3%

RediBill – a game-changer for corporate accounts

2015 introduction of RediBill gave Red Roof franchisees the advantage:

A true centralized Direct Bill option to meet customer demand

One timely, accurate invoice with all Red Roof activity

Moves payment and collections from franchisees to centralized Red Roof team No more invoices or collections to handle Better cash flow for properties

Tried and Tested Renovations We’ve done it – hundreds of timesOur owner/operator history makes us expert at researching and testing any recommended standards and renovations

Sample Properties completing 100% NextGen® renovations PLUS+ Properties

SAMPLE PROPERTIES

NUMBER OF PROPERTIES

OCC. RATE Index ADR Index REVPAR Index

Complete NextGen /PLUS+

Properties*

31 7 3.4% 113.0% $76.79 118.4% $56.37 133.8%

* Represents the average occupancy rate, average daily room rate and RevPAR for Red Roof Affiliate Managed and Affiliate Owned hotels that have implemented the NextGen® renovations standards. These locations were open and operating for at least 2 full years, started renovations in 2011 or later and had completed NextGen status for the entire period of January 1, 2015 through December 31, 2015, 31 properties. Indexed to tract scale, STR.

Sample properties completing NextGen® Elements

SAMPLE PROPERTIES

NUMBER OF PROPERTIES

OCC. RATE Index ADR Index REVPAR Index

Renovated Properties

67 73.0% 117.4% $71.17 116.5% $51.95 136.8%

Average Occupancy Rate, Average Daily Room rate and RevPAR for Red Roof Affiliate Managed and Affiliate Owned hotels that have

implemented either the complete NextGen renovations (NextGen Properties) or specific standard design elements (“Partially Renovated

Properties”). These locations were open and operating for at least 2 full years, started renovations in 2011 or later and had completedNextGen status for the entire period of January 1, 2015 through December 31, 2015,67 properties. Indexed to tract scale, STR.

Franchisees Approve NextGen®

FOCUS ON THE FUTURE RED ROOF PLUS+

Roof PLUS+ Introduced in 2013

• Represents the average occupancy rate, average daily room rate and RevPAR for Red Roof Affiliate Managed and Affiliate Owned hotels that have implemented the NextGen® renovations standards. These locations were open and operating for at least 2 full years, started renovations in 2011 or later and had completed NextGen status for the entire period of January 1, 2015 through December 31, 2015, 31 properties.

** Smith Travel Index

***Review Metrix 2010-2014

Franchisee Quality MattersTrip Advisor

Average TripAdvisor 4.3 3.8 3.4 3.0 2.1

Corporate Inns 4.3 4.0 3.9 3.6 3.0

116113

109

107

85

70

80

90

100

110

120

1stQuintile

2ndQuintile

3rdQuintile

4thQuintile

5thQuintile

Ind

ex t

o T

ract

Sca

le

Franchise Inns Tract Scale by TA Score

31% Difference

Franchisee Quality MattersCS Score

Average CS Score 87.2 82.5 79.5 74.5 62.8

Corporate Inns 87.4 85.0 83.0 80.9 75.7

OUR GUESTS APPROVE

in Online Guest ReviewsFive Years Running!(2010, 2011, 2012, 2013, 2014)

Among all Economy Hotels

Review Metrix CSI Benchmark2014 YTD: Red Roof Inn remains at the top of the competitive set

FOCUSED CONVERSIONS

#498 – Hartford, CTBefore Open 3/31/2016 – 94 rooms

(Holiday Inn Express)

#498 – Hartford, CTOpen 3/31/2016 – 94 rooms

(Holiday Inn Express)

#401 - Hershey, PA Open 6/25/2015 – 25 rooms

(Chocolate Avenue Inn)

#401 - Hershey, PA Open 6/25/2015 – 25 rooms

(Chocolate Avenue Inn)

Wilmington, DEAfter

LOBBY - After

LOBBY - Before

San Diego - Before

San Diego - After

Austin - Before

Austin - After

#497 RRI Vitoria – Brazil

Opening: 4/20/2016Room Count : 80Location : Vitoria E.S.Attractions : Beaches

#443 Curitiba, Brazil Open 9/1/2015 –96 rooms

(BTG Hotels & Resorts)

Questions?

Phil Hugh

Chief Development Officer

Red Roof Inn

Phugh@redroof.com

(713) 576-7417

Rachel Humphrey

VP Franchise Relations

AAHOA

rachel@aahoa.com

(404) 419-8985