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Investor Presentation
DISCLAIMER
This presentation (the “Presentation”) is provided for information purposes only.
Forward Looking Statements. Certain matters discussed throughout all of this presentation constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as “expect,” “estimate,” “believe,” “anticipate,”
“should,“ “will,” “forecast,” “plan,” project,” “assume” or similar words of futurity identify such forward-looking statements. These forward-looking
statements are based on management’s current beliefs, assumption and expectations regarding future events, which in turn are based on
information currently available to management. Such statements may relate to projections of the Company’s revenue, earnings and other financial
and operational measures, Company debt levels, ability to repay outstanding indebtedness, payment of dividends, and future operations, among
other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee
future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the Company to differ materially from those expressed in or
contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic
conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators
and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology
utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; the outcome of litigation; and
our ability to effectively manage our indebtedness. These and other risk factors are discussed in detail in the Risk Factors section of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on April 21, 2018. We
undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or
otherwise, except as required by law.
Non-GAAP Financial Measures. Management believes that non-GAAP financial measures may be useful in certain instances to provide additional
meaningful comparisons between past, present and future operating results and as a means to evaluate the results of core, ongoing operations.
Within this presentation, reference is made to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). See Appendix –
“Reconciliation of Adjusted EBITDA” for a reconciliation of Adjusted EBITDA to net income (loss). EBITDA and Adjusted EBITDA are commonly used
measures in our industry, and we believe they are a complement to reported operating results. EBITDA and Adjusted EBITDA are not intended to
represent net income (loss) defined by generally accepted accounting principles in the United States (GAAP). In addition, other companies in our
industry may calculate EBITDA and Adjusted EBITDA differently than we do or may not calculate them at all, limiting the usefulness of EBITDA and
Adjusted EBITDA as comparative measures. While management believes that the non-GAAP measurements are useful supplemental information,
such adjusted results are not intended to replace the Company’s GAAP financial results and should be read in conjunction with those GAAP results.
Information as of March 31, 2018 unless otherwise noted.
2
RLH BY THE NUMBERS
~1,400 Hotels
RLH by the numbers
~90,000 Rooms
10th 46 3
Largest Franchisor in States Countries
the United States
144% 30%
5-Year CAGR in Unit Growth from Knights
11
Brands
Franchise Unit Growth
through 2017
Inn Acquisition & Inner
Circle Agreement (2018)
3
ASSET LIGHT TRANSFORMATION
Q1/Q2 2018
Since 2014, RLH Corp. has First Resort Opens Ft. Walton, FL – May 2018
disposed ownership interests in
16 hotels with an additional 4 Knights Inn Brand Acquisition (350 Hotels) – Projected Q2 2018
assets marketed for sale.
Inner Circle Agreement (10 Hotels) – Mar 2018
RLH Corp. has gone from 30 1st Signature Inn Signed, SFO – Feb 2018
franchised hotels at the
beginning of 2014 to nearly Oct 2017 – 11 Assets Listed for Sale
1,100 at the end of Q1 2018.
The Knights Inn acquisition in Oct 2017 – Sale of Entertainment Business
May added around 350 more.
Sep 2016 – Vantage Acquired (1,000 Hotels)
Oct 2014 – Hotel RL Brand Launched
Jun 2014 – Hello Rewards Launches
Jan 2014 – Greg Mount becomes President and CEO of RLH
2014
4
SALE OF OWNED HOTELS
“RLH Corporation has strategically chosen to focus on investing its capital in higher-margin hotel franchise business
rather than making significant new investments in direct ownership of hotel assets.” – October 5, 2017 Press Release
Knights Inn Brand Acquisition (~350 Hotels) – Completed Q2 2018
On October 5, 2017, the RLH Board of Directors approved the listing for sale of 11 of its 18
remaining owned hotels
Expected Proceeds – RLH Corp. estimates the current value of the hotels is between $160
and $175 million
Balance Sheet Strength – Sales will reduce debt and increase cash to invest in Franchise
business
Profitability – Higher future profitability and EPS with lower interest, depreciation and
amortization
Retention – RLH Corp. seeks to maintain franchise or management contracts with sold
assets
5
SALE OF OWNED HOTELS
“The sale of these five properties…is a major step in becoming an asset light company. This effort requires less
capital to grow and will provide higher profit margins.” – Greg Mount, President and Chief Executive Officer
On February 27th, 2018; March 6, 2018; April 17, 2018; and May 16, 2018, RLH Corp.
announced the sales of 7 of the 11 hotels listed for sale
Proceeds – $62.0 million
Gain on Sale – $16.2 million
Debt Repayment – $48.7 million
Hotels Sold – Redding, CA; Eureka, CA; Pasco, WA; Richland, WA; Boise, ID; Bend, OR; Post
Falls, ID
Retention – All buyers signed franchise agreements to retain the RLH brands
6
MID AND UPSCALE FOCUS
“RLH Corp. is committed to propelling our mid and upscale business.” – Paul Sacco, Chief Development Officer
RLH Corp. is committed to mid and upscale growth because…
Longer Term Contracts – Mid and upscale contracts generally have
longer contract terms (all ten recent Inner Circle franchise agreements
have 20-year terms)
Higher NPV – Mid and upscale contracts generally provide higher
return on investment.
RLH Corp. is focused on creating value through…
Easy Conversions – Easy conversions versus new builds
Low Capital – Low cost common sense property improvement plans
RevPAK and Other Technology – Designed to improves returns on
invested capital for hotel owners and enhances the RLH Corp. position
in executing the right acquisitions
7
INVESTMENT HIGHLIGHTS
Asset Light Franchise State of the Art Guest Mgmt
Strong Organic Growth*
Model Platform
High ROIC, asset-light Executed 144 license Developed & deployed
franchise model with national agreements in 2018 proprietary digital guest and
and international scale revenue management platform
consisting of nearly 1,400 More than 25 midscale and (RevPAK) consisting of ~15
hotels and 90,000 rooms upscale properties expected to software service providers to
open in the next 18 months deliver best-in-class functionality
In the past two years RLH has including 5 Hotel RL properties
executed a series of important Integrated platform provides
transactions including Vantage, RLH recently added a Chief solutions for administrative
Inner Circle, and Knights Inn. Development Officer who will functions, reservations, digital
focus on growing the franchise marketing, revenue mgt and
Increased brand recognition operations for the upscale guest services, as well as
and business development brands business intelligence &
personnel designed to deliver performance measurement
acceleration of new franchise Deployment of RLH
agreements technology platform (RevPAK Enhances ability to optimize
and Hello Rewards) driving operational performance
results
Provides RLH ecosystem with
up to 300 booking channels
* As of December 31, 2017
8
INVESTMENT HIGHLIGHTS
Innovative Rewards Seasoned Leadership Balanced Sheet Poised for
Program Team Growth*
Revolutionized rewards Over 150 years of collective As RLH transitions out of hotel
program to recognize retail lodging experience ownership it is able to generate
consumer the capital base and cash to
Proven ability to implement and fuel faster acquisitions
Instant gratification as well as execute transformational
rewards for multiple stays business plan Modest corporate level debt
Preferential pricing and Deep expertise in lodging,
premium perks with national, franchise development, digital
regional and local retailers and marketing and brand
service providers positioning and the execution
of asset-light business model
In April 2017, more than 360K
former Vantage Rewards
members were migrated into
Hello Rewards
* As of December 31, 2017
9
INNER CIRCLE FRANCHISE AGREEMENTS
“RLH Corp. is committed to propelling our mid and upscale business. These 10 hotels…will play a significant role as
we grow our mid and upscale brands across North America.” – Paul Sacco, Chief Development Officer
On March 1, 2018, RLH Corp. announced 10 new
franchise agreements with hotels owned and managed
by Inner Circle and its affiliates
Hotels Added – Ten Red Lion Hotels bringing the
company’s mid and upscale brands to over 100 hotels
Locations – St. Louis, MO; St. Joseph, MO; Baltimore, MD;
Hartford, CT; Cheyenne, WY; Billings, MT; High Point, NC;
Cromwell, CT; Appleton, WI; Albany, NY
Rooms Added – 2,584 rooms (over 250 rooms per hotel)
Terms – 20-year term franchise agreements
Timing –Seven (7) opened in 1Q18, St. Louis, MO; St.
Joseph, MO; Appleton, WI; are scheduled for June
10KNIGHTS INN BRAND ACQUISITION
On April 4th, 2018 RLH Corp. announced it had entered
into a definitive agreement to acquire the Knights Inn
brand
Aggregate Price – $27 Million
Profitability – Annualized EBITDA potential is expected
to exceed $5 Million
Hotels Added – More than 350 hotels with around 47
hotels in the pipeline
Unit Growth – Increases RLH’s franchise units by over
30 percent
Closed – Second quarter of 2018
11RLH ADVANTAGE
ADJUSTED EBITDA
The Franchise division contributed 37% of the
overall consolidated RLH Adjusted EBITDA in 2017.
Franchise Percent of Adj EBITDA (Cont Ops)
2018 will be a year of significant transition. RLH set
out to sell 11 of its ownership interests. The sales of
these properties will reduce EBITDA generated by
owned hotels, which will affect overall earnings in
the short-term. The cash from the sales of these
properties, however, will fuel further franchise
growth, leading to larger profits and faster growth 37%
into the future.
19%
($ in Millions) Continuing Operations
Adj EBITDA 2015 2016 2017 3%
Franchise Division* 0.3 3.3 8.3 2015 2016 2017
Hotel Division* 11.2 13.9 14.1
Total RLH 11.5 17.2 22.4
Total RLH % Change 50% 30%
Franchise % of Total 3% 19% 37%
* Corporate overhead fully allocated to divisions based on profitability.
13BRAND STRATIFICATION PLAN – 11 FLAGS
Upscale offering
UPSCALE Centrally located in destination, adventure and university cities
Flat fee (Introductory offer)
Midscale offering with or without a restaurant
Primary and secondary markets
Variable fee (% of GRR)
Midscale Boutique offering
Variable fee (%GRR)
Midscale Extended Stay
Flat fee
Affordable Boutique offering
Older hotels in markets that could support RevPAR lift
Flat fee
Upper Economy offering
Flat fee
Economy offering
Strong national presence with numerous opportunities for repositioning
Flat fee
Lower Economy offering
National brand with few brand restrictions
% Gross Revenue 14
ECONOMYRLH CORP. AND PEER BRAND COMPARISON
Luxury
Upscale
Upper
Midscale
Midscale
Upper
Economy
Economy
Value
15THE CASE FOR HAVING DIVERSE BRANDS
Brand Recognition Each brand must offer a unique value
proposition so it has the potential to scale
nationally
Space to Innovate We can compete in the same game
everyone else plays or we can change the
game. To win, we need to change the
game
3… Open New Markets By creating a solution that meets the needs
of the independent owner, we open up 30%
7… of the market that is independent today
16RLH CORP - ADVANTAGE
Delivering Superior Return on Invested Capital for Owners and Investors
RLH - Advantage
Our consumer owner friendly approach with a constant focus on technology and cost conscious
investing through:
Maximizing revenue through investing in the OTAs marketplace and
aligning all elements of customer acquisition into a single direction.
Straightforward efficient booking system that engages and drives
customer bookings while providing an unparalleled user experience
Delivering RLH standards vs. industry standards that provide proprietary
integration, flexible and cost conscious PIPs, and brand Signature
Moments.
Investing in programs and support to provide profitability on the values of
each brand
17ONLINE TRAVEL AGENCY (OTA) APPROACH
A Smarter Approach to Online Travel Agencies (OTAs)
Maximizing the marketplace to the benefit to our hotel owners and hotels
Other Franchisors RLH CORP.
Invest in funding solutions that make Invest in maximizing mass market-places
travelers’ lives easier to the benefit of our hotels
• Inefficient use of marketing fund dollars • Educate owners on how to maximize
revenue through this strategy
• Little to no support for hotel owners to
with and against the OTA • Direct market to OTA users on benefits
of direct channel bookings
• False belief that OTA cost a % of gross.
• Behind-the-scenes Auto-Save program
to minimize costs. RLH Corp. estimates
~5% cost saving
18UNIQUE APPROACH TO REVENUE
MANAGEMENT
Centralized leadership creating a united
customer acquisitions model guided by
an in-house data science team.
Industry-leading revenue management
software that dynamically prices hotels.
Full service revenue strategy consulting
that leverages cutting edge resources
including proprietary data visualization
solutions.
In-house revenue management team
functioning like a ‘Wall St. day-trading war
room’ that is channel agnostic, pursuing
the highest minute-by-minute returns.
Integrated enterprise data warehouse to
facilitate selling customized products to
targeted audiences on a broad-scale.
Global sales team incentivized to align
with revenue management pricing
strategies as well as transient brand
promotions. 19RLH - AN EVOLVED STRATEGY
RLH - An Evolved Strategy
Exclusive access to real-time micro market demand data:
an industry first at this level.
Media program which solicits pre-enrollment in a series of
scenario-based digital allowing the enterprise to immediately
activate relevant content and product when the ‘unknown’
occurs.
International exposure through partnered media buys.
Dual-tiered rate option to drive booking to brand.com over
GDS
Targeting the infrequent/non-affiliated business traveler with
qualified discounts and additional Hello Rewards perks.
20DRIVING RESULTS WITH TECHNOLOGY
Book Serve Repeat
INCREASE BOOKINGS ENGAGE CUSTOMERS MEASURE RESULTS
Up to 300 booking channels Customer Relationship Management Reputation Management
Translation Services Single Sign On & Dashboard
Central Reservations System
Revenue Management System
21HELLO REWARDS
A Guest Recognition Program for the Infrequent Traveler
Increased by 83% in 2017
ADR premium of Hello Rewards vs
non-members was 23% in 2017
Why RLH Corp. Chooses to be How Our Program Works
Different
Utilize a familiar retail promotion model
80% of travelers are forgotten about by where guests earn Hello Rewards currency
other recognition programs for every stay
Road warriors are high volume but also Currency expires faster than traditional
low margins loyalty programs but stacks for added guest
appeal
Focus on faster return visits and direct
channel reservations Cost to owners only incurred when stays are
redeemed
22FRANCHISE ECONOMICS AND GROWTH
POTENTIAL
More than 25 midscale and upscale properties expected to open in the next 18
months including 5 Hotel RL properties
Hotel RL Midscale Economy
Room Count 130 105 59
Fee Type Flat per Key* Percent of GRR Flat per Key
RLH Revenue 350K 136.5K 53.8K
RLH Profit 130k 45.5K 15.2K
Profit Margin % 37.1% 33.3% 28.3%
Startup Costs - Payback** 6-9 month 3-9 month 0-6 month
Execution to Opening 4 - 12 months 2 - 8 months 1 - 3 months
Expected Openings (12-18 Mo.) 5 Approx. 20 Approx. 90
* Introductory offer
** Some Hotel RL and Midscale deals in major MSAs and/or key markets may include key money investment with average payback of less than 2 years
*** All figures above are year one averages
232018 Q1 PERFORMANCE
SUMMARY FINANCIALS
Summary Income Statement - 3 Months Ending 3/31/2018
Continuing Operations
Revenue 2018 2017 %
Hotel $22.9M $25.6M -10.6%
Franchise $10.1M $10.9M -7.2%
Other $0.0M $0.1M -
Total Revenue $33.0M $36.6M -9.7%
Adjusted EBITDA $0.4M $1.2M -64.1%
EBITDA Margin 1.3% 3.2% (193) b ps
Balance Sheet as of 3/31/2018
RLH Pro-Rata Cash $21.3M
RLH Pro-Rata Debt* $42.8M
RLH Pro-Rata Net Debt $21.5M
Average Interest Rate 6.9%
*Excludes impact from sale of Post Falls property.
Hotel sales so far in 2018 have resulted in $41.9 million in debt reduction,
lowering pro rata debt to $42.8 million – RLH Q1 Earnings Release
25STRONG LEADERSHIP TEAM
Greg Mount
President & CEO
30+ Year Industry Veteran
JV Real Estate Expert
Proven Growth Strategist
Former President of Richfield Hospitality
Doug Ludwig Paul Sacco
CFO & Treasurer Chief Development Officer
30+ Year Industry Veteran 20+ Year Industry Veteran
Former CFO of Four Seasons Former President and Chief
Experienced change agent in asset light Development Officer, TPG Hotels
business models and Resorts
Extensive global financing and capital Former SVP North American
raising experience Development, Starwood Hotels and
Resorts
Leslee Torres Calvin Anderson
SVP, Digital Loyalty & Partnerships Chief of Revenue Optimization
15+ years of experience delivering 15+ Year Industry Veteran
transformational change Former Vice President of Managed
7 years of hospitality experience Services at Duetto
Extensive experience designing and Former Chairman of HSMAI
implementing revenue opportunities Revenue Optimization Conference
Leader in concept and process redesign 2015 NYC Revenue Management
Broad change management experience Executive of the Year
262018 KEY INITIATIVES
Sales and Acquisitions OTA Support Services
Successful completion of 5 hotel asset sales Industry-first technology helping our owners
in Q1 and Knights Inn acquisition in Q2. navigate the “OTA maze” more easily and
Additional hotel sales in process with cash effectively – creating new revenue streams.
available for future franchise acquisitions.
Digital Channel Tech Enablement
Refresh
A mobile-first approach that prioritizes the Investing in new technology enabling RLH
user experience, site analytics, and and franchise owners to work smarter,
operational efficiencies faster, and more cost effectively.
27INVESTMENT HIGHLIGHTS
Experienced
Innovative
Building Renowned
Strategy Team
Innovative Technology Proprietary
Advances Integration
FRANCHISE OF CHOICE
Creative Guest Increased Unit Growth
Recognition Program through Acquisitions
28APPENDIX
HOTEL RL
Hotel RL is an
experience of all
things authentic,
creative and curious.
Offering a taste of the
local scene in a laid-
back environment, we
invite open-minded
travelers to work, play
CORE VALUES
and pursue their
passions freely. PIONEER
NURTURE
SIGNATURE ELEMENTS WONDER
• Steps & open lobby
• Creative programming
• Techie
• Unique guest recognition
program 30RED LION
Red Lion Hotels and Red
Lion Inn & Suites open the
door to the best local
experiences for travelers
seeking to get the most
out of their trip.
SIGNATURE ELEMENTS
• Strong focus on comfort
essentials
• Service culture rooted in PNW
values
• Communal lobby
• Best value
• Get Local CORE VALUES
• Unique guest recognition FRESH | GENUINE | ADVENTURE
program
31SETTLE INN
Kick off your shoes, spread
out and take advantage of
the best value in town at
Settle Inn Extended Stay.
With big, comfy studio
rooms, neighborly service
and lots of space to relax
and do your thing, we invite core values
you to unpack, unwind and reliable • bright • easy
settle in.
SIGNATURE ELEMENTS
• Strong focus on comfort
essentials
• Bright space
• Service culture based around
consistency, familiarity and trust
• Bedding program
• Unique guest recognition
32
programGUESTHOUSE
GuestHouse invites you to sit
back, relax and enjoy a
crisp, clean stay. We focus on
getting all the comforts of
home just right – spotless
spaces, friendly faces and
service you can rely on –
because when you stay here,
you’re a guest in our house.
core values
SIGNATURE ELEMENTS trust
• Strong focus on comfort clean
essentials
• Service culture based around comfort
consistency, familiarity and trust
• Bedding program
• Unique guest recognition
program
33COUNTRY HEARTH & FRANCHISEASY
Franchiseasy is
quick and simple. It A Faster, Easier
puts you in charge Way to Franchise
with access to
everything delivered
online and applying
takes minutes.
Select only the
services you need.
CORE SERVICES
• PMS
• All Reservation Fees
• Website
• Distribution Channels
34SIGNATURE
Utilizing dazzling
visuals and captivating
motifs, Signature and
Signature Inn brings to
life the luster and feel of
the golden era of mid-
century Americana,
creating a truly
memorable stand-alone
in the economy and
midscale marketplace. CORE VALUES
SIGNATURE ELEMENTS FRESH
• Modern retro design GENUINE
• Convenient locations
ADVENTURE
• Colorful and cool tone of
voice
• Unique guest recognition
program
35AMERICAS & CANADAS BEST VALUE INNS
They are
independent, proud
and enjoy getting the
most for their money.
They’re in search of a
relaxing, clean and
convenient place to
rest after a long day.
SIGNATURE ELEMENTS
• Best value
• Prideful quality
• Patriotism
• Strong work ethic
CORE VALUES
• Unique guest recognition
program FRESH | GENUINE | ADVENTURE
36REVITALIZED PROTOTYPES
37VANTAGE ACQUISITION
DEAL SUMMARY:
Consistent with RLH’s desire Immediately added significant scale Unique business model
to grow the asset‐light, 1,000 to the system with the addition of has been historically
franchise business nationwide HOTELS over 1,000 hotels – increasing successful in the economy
national presence by 19 states and midscale hotel brands
Significant strategic and Acquired considerable
operating benefits. Franchise Complementary to the
franchise management
Segment profit margin was GuestHouse / Settle Inn
talent in the economy /
28.3% for 2017 acquisition in 2015 Stock and earn‐out
mid‐scale segments
components of the
transaction consideration
create alignment with the
Debt free platform that contributed Contracts are typically one year with Vantage principals /
$7M of EBITDA to RLH in 2017 automatic renewals; royalty and marketing earn‐out further protects
without assuming any economies of fees are based on room count versus rooms RLH from risk of contract
scale revenue; average hotel is 50 to 60 rooms terminations post‐closing
Provides additional Numerous brands – the majority of
scale and leverage which are Americas Best Value Inn
for marketing funds and Canadas Best Value Inn
38RECONCILIATION OF ADJUSTED EBITDA
Three Months Ended
March 31,
2018 2017
($ In 000s)
Net income (loss) $ 7,338 $ (5,123)
Depreciation and amortization 4,392 4,510
Interest expense 2,247 1,958
Income tax expense 135 77
Net income from discontinued operations - (172)
EBITDA 14,112 1,250
Acquisition and integration costs (1) 104 (175)
Employee separation and transition costs (2) 131 97
Gain on asset dispositions (3) (13,926) -
Adjusted EBITDA from continuing operations $ 421 $ 1,172
(1) Net expenses for 2018 and 2017 are associated with the Vantage acquisition. All acquisition costs and changes in the
fair value and probability of contingent consideration are included within Acquisition and integration costs on the
Condensed Consolidated Statements of Comprehensive Income (Loss).
(2) The costs recognized in 2018 relate to employee separation, and the costs recognized in 2017 consisted of legal and
consulting services associated with the CFO transition.
(3) On October 5, 2017, we announced that we would be marketing for sale 11 of our owned hotels while working to retain
franchise agreements on these assets. In February 2018, five of the RL Venture properties were sold for a gain.
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