HB ON THE SCENE: RLHC and Vantage Outline Plans for Single Company

LAS VEGAS—This week marks the first conference and trade show for Vantage Hotels since Red Lion Hotels Corporation (RLHC) acquired it. Held here at Hard Rock Hotel & Casino Las Vegas, the theme of the conference was “Connect. Unite. Excel,” and executives addressed what that would mean going forward as a single company.

“The lodging industry is in a constant state of change,” said Roger Bloss, EVP/president of global development, pointing to mega-mergers by the OTAs with over $8 billion in advertising, which meant the company needed more negotiating leverage to lower third-party distribution costs. “The OTAs aren’t the only ones making huge consolidations. Marriott’s acquisition of Starwood makes it the largest hotel company in the world. Major hotel companies with many brands are combining their marketing resources to leverage their media buying power.”

“The evolution of the travel process has changed dramatically. From social media to Airbnb and the sharing economy, guests are looking for experiences in addition to clean rooms. Technology is advancing at a rapid pace and we’re paying attention to what consumers are concerned with in order to provide the tools to satisfy your guests,” added Bernie Moyle, EVP/COO. “Our commitment to you has never changed. We have always expanded your resources and revenue opportunities and provided advance technology. To ensure this promise and to continue rising to the next level, we found the ideal partner in Red Lion Hotels Corporation.”

Greg Mount, president/CEO, explained, “This is truly a new and exciting journey to combine the talents of our two companies into one group that is stronger and more technologically advanced, while at the same time, maintaining your unique culture that has been so successful… We’re owners and operators just like you and it was a perfect fit to align with Vantage, the leader in the economy segment. We have a multifaceted growth strategy to build national scale that includes acquisitions, franchise development and joint ventures. Vantage excels at growth and development, and that will be a major benefit to our continued progression.

“So, how does this affect you?” Mount posed to attendees. “More brands for you to choose from. Achieving scale gives us the opportunity to focus more on brands and crystallize them in the travelers’ minds. That gives us the potential for higher RevPAR and greater market share.”

Strategic initiatives for the company going forward include greater brand recognition; greater channel management; negotiating power with the OTAs enhanced with web, digital and loyalty program capabilities; a broader array of proven technologies, including marketing and revenue resources; and continued momentum and growth for the brands.

The executives outlined how the company will look going forward. For instance, the Vantage name will go away—just not on existing hard signage. “We will sunset the Vantage name as it relates to how we refer to the company internally and externally; however, we’re not making any changes as it relates to the signage at the properties,” said Mount. “Of course, as we add new hotels to the system we’ll remove the ‘by Vantage,’ but there are no plans to make wholesale changes on the hard signage.”

What about loyalty programs—will they be merged? “The endgame has to be consolidation, but that’s in name, not necessarily in offer,” said Moyle. “For instance, we talked a lot about giving the customer what they want when they want it, and certainly some consumers want that 15% discount… We need to get away from the concept of loyalty—it’s not loyalty, but giving them the connection they want. We’ll have to see the [programs]over time evolve and join together, but I don’t think we’ve figured out all the mathematics just yet.”

“If we’re going to be competitive in loyalty, we need the technology to support that,” added Bloss.

Whenever a merger or acquisition occurs, the possibility of brand consolidation always comes up. In this case, the answer to that question is maybe. “When we acquired America’s Best Franchising, we notified everybody that America’s Best Inn didn’t make a lot of sense,” said Bloss, pointing to its similarity to Americas Best Value Inn. “We sunsetted that and that will continue on. The next stratification is over the next couple of days—to talk to you all. We don’t want to presume we have all the ideas, so a lot of it will come from you.”

Noting there will be a big focus on Hotel RL and Signature Inn, Bloss also said he did see the potential to consolidate some brands. “3 Palms was never one of our brands—it came with the acquisition—and there are a handful of properties, so we see that as them having more opportunity to choose one of the brands that we now have,” he said. “How we decide how to move forward will be with a lot of input from you all.”

While Vantage’s one member, one vote model will continue, it will not be adopted to RLHC’s legacy brands. “It’s a different set of circumstances and business standards,” said Mount. “We love it, we’re going to keep it in place; it’s intrinsic and integral to the success of the Vantage brands—it’s not going away—but as you move up to midscale and upscale, the business model is different.”