Company Profile
Red Roof is a leading hospitality company known for its innovative approach to providing high-quality, affordable lodging. Founded in 1973 and headquartered in New Albany, Ohio, the company has grown to nearly 700 properties across four hotel brands, becoming a prominent player in the hospitality industry. With a strong presence throughout the United States and an expanding international footprint in Brazil and Japan, Red Roof continues to extend its reach while maintaining its commitment to value and guest satisfaction.
Challenge and Vision
The COVID-19 pandemic brought significant challenges to Red Roof, necessitating a transformation of its culture and systems. The organization envisioned up-leveling its leaders to navigate these changes effectively. The goal was to enhance leadership development and organizational transformation during the worst year on record for the hotel industry. For example, U.S. occupancy rates dropped from about 70% to 44%, and 70% of employees were laid off or furloughed. (Economic Impact of the U.S. Hotel Industry, 2021)
The Solution
Red Roof’s incoming president, George Limbert, partnered with the Innovative Leadership Institute® (ILI) to:
- Define new vision and values
- Redesign operating models
- Conduct leadership training and coaching across all leadership levels
- Improve cross-functional collaboration and succession planning
Consulting Approach
ILI took a holistic view of the numerous challenges facing the hospitality industry from COVID-19 and made practical recommendations to unify the leadership team around a strategic, actionable plan. These recommendations included:
- Defining vision and values to align strategic decision-making and remain responsive and forward-looking during a highly challenging time
- Redefining the operating model to address leadership communication. It also required adjusting for employee and customer safety, supply chain needs, and overall execution challenges and goals.
- Conducting leadership development programs for VPs and Directors to build successors. It also aimed to build cross-functional collaboration and design solutions to key business challenges and opportunities.
- Providing executive advisory services and coaching for all members of the senior leadership team to increase alignment between individual leaders and their teams. In addition, they addressed macro issues like balancing tough financial decisions with empathy and patience.
- Facilitating ongoing senior leadership transformation-focused meetings
- Conducting the Leading Transformation program for the senior leadership team to identify potential communication and operational gaps caused by the pandemic. This program also aligned decision-making to the company’s vision and values.
ILI and Red Roof partnered to co-facilitate leadership training for several groups. These programs created a much-needed leadership succession program. Key leaders received the development required to step into key roles during a challenging business environment. Moreover, leaders transitioned from a siloed focus to more effective cross-functional collaboration, reducing time to resolve issues and improving solution quality. Their growth and the emphasis on organizational transformation positioned the business to exceed key financial goals.
Results and Impact
These shifts were primarily responsible for Red Roof achieving remarkable growth and financial success in 2021 (during the pandemic). It outperformed its 2019 levels, which had previously been the best in its 49-year history. Key metrics such as Revenue Per Available Room (RevPAR), Average Daily Rate (ADR), and total room revenue increased by double digits.
Key Achievements
- Expansion and Growth: The company launched a new prototype for its extended stay offering, HomeTowne Studios by Red Roof (HTS). It also executed a significant increase in new franchise agreements.
- Increased ADR and RevPAR: Red Roof’s ADR and RevPAR saw substantial gains, with HomeTowne Studios posting a 22.6% ADR increase and Red Roof Inns a 19% increase over 2019 levels. HTS helped boost ADR by implementing reduced cleaning frequency and limited contact services. These changes lowered operating costs while maintaining guest satisfaction. These efficiencies helped preserve margins, allowing for strategic rate increases. Messaging focused on “stay longer, save more” and “clean and safe stays,” which resonated with travelers during the pandemic era.
- Leadership Changes: George Limbert was named president of Red Roof in mid-2021, having served as interim president since October 2020. Limbert’s leadership was instrumental in guiding the company through the challenges of the COVID-19 pandemic and driving its strong performance.
- Career Growth & Internal Mobility: Career development is the #1 reason for turnover across industries. COVID-related layoffs/furloughs in the hotel industry were substantial (70% of the workforce in 2020). Red Roof’s focus on succession planning and leadership pathways helped retain high-potential employees.
Red Roof’s success in 2021 is a testament to its resilience and adaptability in the face of unprecedented challenges. The company’s strategic initiatives, leadership development programs, and commitment to innovation have positioned it for continued growth and success in the hospitality industry. With a strong foundation and a clear vision for the future, Red Roof is well-equipped to navigate the evolving market landscape and deliver exceptional value to its stakeholders. These results continued as Red Roof experienced two more leadership changes. Furthermore, the leadership training enabled the organization to navigate George Limbert’s transition to a new role and the year-long CEO search. They are now continuing to refine their processes and culture under the new leader, Zack Gharib, to meet ongoing industry changes.
Conclusion
The Red Roof case study is a powerful testament to the transformative impact of strategic leadership development during unprecedented disruption. Faced with the single most challenging time the hotel industry has ever experienced, Red Roof didn’t just survive—it emerged stronger, more agile, and more aligned than ever before.
This transformation was not accidental. It was the result of a deliberate, comprehensive partnership with the Innovative Leadership Institute. Through targeted coaching, cultural redesign, and leadership development, ILI helped Red Roof reimagine its operating model. It also helped elevate its leaders and build a resilient organization capable of navigating uncertainty and accelerating performance.
The measurable outcomes—record-breaking ADR and RevPAR, improved cross-functional collaboration, and a revitalized leadership culture—underscore the value of investing in leadership as a strategic lever. This case affirms that in times of crisis, innovative leadership isn’t optional—it’s the difference between disruption and transformation.