Red Roof Announces Completion of Its Recapitalization; Resolution Will Position Brand for Long-Term Growth and Profitability
Investment Partners Commit $90 Million for Renovations and Upgrades
COLUMBUS, Ohio --(BUSINESS WIRE)-- Red Roof Inns, Inc. has recapitalized the ownership of its assets with support from experienced hospitality industry partners, positioning the company for strong profitable growth, robust development and expansion. This capitalization includes significant funding for renovations.
Affiliates of Five Mile Capital Partners and Westmont Hospitality Group, in a joint venture, have acquired the ownership of 143 Red Roof Inns, totaling nearly 17,000 rooms. The joint venture has committed over 70 million dollars for renovating and upgrading the portfolio with sleek and modern NextGen® design elements. Five Mile Capital has deep hospitality experience, having been involved in Extended Stay America, Innkeepers and CNL Resorts.
Red Roof Inns recently completed a similar transaction with Dune Real Estate Partners and Westmont Hospitality Group affiliates, which included the acquisition of 51 Red Roof Inns. This joint venture plans to contribute an additional 20 million dollars for property renovation and upgrades. The Dune Real Estate Funds make opportunistic investments in a broad range of real estate-related assets, portfolios, joint ventures and operating companies worldwide and are highly experienced hospitality investors.
"Now that the recapitalization is complete, the investments from both the Five Mile and Dune ventures position the brand well for long-term health and profitability," says Andrew Alexander, president, Red Roof Inns, Inc.
"This committed capital provides long-term stability to the company and highlights the fact that Red Roof is an attractive investment with a unique dual concept of an owner-operated, franchise-centered business. Our strong belief in our own product as we build our franchise grants us the ability to maintain high standards in both realms. We look forward to the future with great optimism as consumers continue to look for the excellent value that Red Roof offers: Nice Place. Nice Price.®"
Red Roof has emerged as a leader in the hospitality sector, offering value-driven deals and continuing to remain ahead of the curve with modern renovations, such as its sleek NextGen® redesign and its revamped Superior King Rooms. Along with delivering to consumers the strong value proposition of midscale lodging at an economy price, Red Roof provides investors with a strong infrastructure for profitable growth and market share.
Despite a turbulent economy, Red Roof has outperformed both the economy and midscale segment in RevPAR percent change year to date with a strong 7.1 percent increase. In the past quarter, Red Roof has increased RevPAR by 7.3 percent over the prior year, with an increase in both occupancy and ADR. The brand holds an impressive 115 percent RevPAR index against the economy tract scale year to date.
All Red Roof properties involved in the recapitalization have entered into franchise agreements with Red Roof Franchising, LLC and will continue to be managed by RRI West Management, an affiliate of Red Roof Inns.
About Red Roof®
Red Roof® is a leader in the economy hotel segment with both franchised and corporate-owned properties, serving millions of guests each year. The company and hotels are known for a warm and welcoming spirit, along with their Smart-by-Design®, value-added amenities that are simple, yet economical, and meet the needs of every guest. With coast-to-coast locations, Red Roof has nearly 350 properties in the U.S. Having completed a nationwide renovation of their properties, the primary goal at Red Roof is to provide customers a savings without sacrificing comfort. Red Roof's new NextGen® hotels feature sleek exteriors with luxuriously appointed and technologically advanced interiors that signal a new era for the hotel chain. Red Roof guests consistently see the brand excelling in expectation and quality in both product and price. Nice Place. Nice Price.® is what every consumer can expect when they stay at any one of our hotel locations; and because our company has a single brand in our portfolio, Red Roof also offers franchisees One Brand. One Focus.™ Most recently, Red Roof launched its Nicest Price® advance purchase option, which rewards guests who reserve and pay for their room in advance. The Columbus, Ohio-based company has more than 4,500 employees. For more information or reservations, call 800.RED.ROOF (800.733.7663) or visit redroof.com.