Synopsis

This is a review of how Red Roof Inn leveraged nationwide weather data and historic flight cancellation data to hyper-target ads to stranded airline passengers. The success of this project lead to the company’s record-breaking sales during an especially harsh winter.

About Red Roof Inn

The Red Roof Inn, established in 1973 in Columbus, Ohio, is a chain of affordable hotel accommodations across the United States1. They boast over 600 locations, most of which are in the midwest and eastern states1.

In 1996, the company started franchising; in 2019 Red Roof Inn was ranked second in the Best Hotel Franchise Opportunities by Profitable Venture Magazine2. In 2012, the chain invested $200 million into renovations for their hotels nationwide2.

As part of this investment, Red Roof Inn created a team to leverage big data analysis in order to target advertisements towards travelers who experienced canceled flights at nearby airports3.

Methodology

This so-called Flight Cancellation Coup project began by gathering public data. This data included government statistics and nationwide weather data, as well as historic flight delay and cancellation data4. The copious amounts of data then needed to be analyzed in order to determine when and where flights were most likely to be delayed overnight or when they were completely canceled.

The analysis determined that 2 to 3% of flights, or around 500 flights each day, were either delayed or canceled, leaving approximately 90,000 passengers stranded5. Therefore, the team decided to try to target advertisements towards stranded passengers because many Red Roof Inn locations are very close to major airports across the country6.

Partnering with the digital company 360i, Red Roof Inn created a technology that could “process thousands of bits of live cancellation data and filter it through a conditional algorithm that automatically boosted bids” to show ads that targeted stranded passengers6. This algorithm considered current weather conditions, time of day, and volume of cancellations to predict the optimal time to increase bids for advertisements5.

These advertisements were specifically targeted towards passengers doing mobile searches for last-minute lodging. The Flight Cancellation Coup algorithm also personalized messages, such as “Stranded at O’Hare? Check out Red Roof Inn” along with how far away the nearest Red Roof Inn was located5. To find the target audience, the brand combined geodata with a specific set of search queries to hyper-target people looking for nearby economy lodging3.

Challenges

Since most of the data used for this project was publicly available real-time data, data access was not a major challenge for the company. Projects involving any kind of advertisements have basic constraints on privacy issues, but privacy issues were not a major concern in this project either. The quality of the data in this case was strong, as weather and flight cancellation data tend to be very accurate.

The biggest challenge Red Roof Inn and 360i faced was increasing bids for advertisement space, such as when the timing was optimal to reach people as soon as they were using mobile devices to search for hotels7. Red Roof Inn had problems competing with other companies for advertisement space, especially with the limited real estate of mobile devices, within their budgetary constraints3. The Flight Cancellation Coup technology had to process API data very quickly between the time that a flight was delayed or canceled to the time stranded passengers started searching for nearby lodging7. They did not want to increase bids too early or too late in order to stay within budgetary constraints7.

Results

The winter of 2013 and 2014 broke records. Usually winter means less business for hotels, but due to the Flight Cancellation Coup, Red Roof Inn saw a 10% increase in business during these winter seasons8. They gained first position for 75% of key last-minute hotel searches7. They also saw a 266% increase in non-brand mobile bookings, a 115% increase in non-brand mobile investment, and a 650% increase in share-of-voice for key travel search queries7. Red Roof Inn received several awards for this project, including gold awards for the 2014 Interactive Advertising Bureau MIXX Awards: Search Marketing, the Mobile Marketing Association’s 2014 Global Smarties Award, the MediaPost’s 2014 OMMA Awards for Search Marketing: SEM Campaign, the 2014 US Search Awards: Best Mobile Campaign, and the Digiday Sammy/Mobi Awards: Best Mobile Direct Response Campaign6.

References

  1. The Red Roof Difference. (2022). Red Roof Franchising. https://www.redrooffranchising.com/about/our-history ↩ ↩2

  2. Martins, A. (2019, March 21). 50 Best Hotel Franchise Opportunities for Sale and Their Cost. ProfitableVenture Franchise. https://www.profitableventure.com/franchise/hotel-opportunities/#Red_Roof_Inn ↩ ↩2

  3. Red Roof Inn Turns Flight Cancellations into Customers. (2014). In MMA Global. https://www.mmaglobal.com/case-study-hub/upload/pdfs/mma-2014-827.pdf ↩ ↩2 ↩3

  4. Bloom, A. (2015, May 26). 20 Examples of ROI and Results with Big Data. Vmware.com; 20 Examples of ROI and Results with Big Data. https://tanzu.vmware.com/content/blog/20-examples-of-roi-and-results-with-big-data ↩

  5. Smith, N. (2014, October 17). Red Roof Inn Turns Weather Woes Into Major Sales. Lima. https://www.limaconsulting.com/red-roof-inn/#:~:text=Leveraging%20open%20data%E2%80%94or%20free%20 information%20such%20as%20 government ↩ ↩2 ↩3

  6. Zhu, K. (2014, October 20). Red Roof Inn® Paving The Way In Digital Innovation. Franchising.com. https://www.franchising.com/news/20141020_red_roof_innreg_paving_the_way_in_digital_innovati.html ↩ ↩2 ↩3

  7. Roper, P. (2014, December). November Best Global Digital Marketing: Red Roof Inn’s search campaign, Burger King’s Motel, Turkish shoppable soap opera. Marketing Magazine. https://www.marketingmag.com.au/news-c/november-best-global-digital-marketing-red-roof-inns-search-campaign-burger-kings-motel-turkish-shoppable-soap-opera/ ↩ ↩2 ↩3 ↩4 ↩5

  8. Marr, B. (2016, January 26). How Big Data And Analytics Are Changing Hotels And The Hospitality Industry. Forbes. https://www.forbes.com/sites/bernardmarr/2016/01/26/how-big-data-and-analytics-changing-hotels-and-the-hospitality-industry/?sh=5f85e5701c22 ↩