COLUMBUS—Economy hotels have become more popular throughout the US, and now Red Roof®, one of the nation's leading brands, is expanding its reach into Canada. The Columbus-based company just signed a twenty-year deal with developer Glenn Squires to build and brand forty hotels across that country.

“There is no real economy segment in Canada,” Phil Hugh, chief development officer, Red Roof Inn, tells GlobeSt.com. “Limited service hotels generally have higher rates than their US counterparts, so offering a true economy brand with a large US footprint offers a unique development opportunity for the Canadian market."

The first four hotels will open by 2016 in Grand Falls and Bay Roberts in Newfoundland & Labrador and Wolfville and Antigonish in Nova Scotia. Red Roof and Squires' Pacrim Hospitality Services Inc. plan to build new hotels rather than use conversions, with most built as Red Roof PLUS+® properties, Red Roof's enhanced and upgraded offering.

“We will benefit from Red Roof's scale and many Canadians travelling to the US will be exposed to the brand while we build recognition here in Canada,” Hugh adds.

“This agreement signals Red Roof's strong growth internationally and the demand for our upscale economy product,” says Andrew Alexander, president, Red Roof. “The key to our success is our ability to find partners with deep local knowledge. Canada is a perfect market for us. Canadian consumers are ready for a true economy hotel brand; a new value proposition.”

The Nova Scotia-based Pacrim will first assist in the development of hotels in the Eastern and Atlantic regions and then in the next few years will start a second group of properties in Ontario, British Columbia and Alberta.

This is not the first time that Red Roof has expanded across national boundaries. Late last year, the company formed a partnership with Brazil-based Nobile Hotels to develop 35-40 properties – new builds and conversions - across that country over the next twenty-five years. The first property, a conversion of an existing hotel, will open in Brasilia in 2015.

Red Roof's Canadian venture is international in several ways. Squires has taken a 50% interest and partnered with Chinese investors to form Canada China Culture Hospitality Development Inc. The company has committed to fund a number of Red Roof Inns across Canada.

“The Red Roof name has very positive connotations for the Chinese,” Hugh says. Furthermore, “there are over 300,000 Canadian citizens in Hong Kong due to previous immigrant investment programs. Chinese investors are looking to develop businesses their children can take over, operate and grow. Red Roof provides a great model.”

“The EB 5 program in the US is also attracting many Chinese investors,” he adds. “We are safe havens with proven and established reliable legal systems. Uncertainty in many parts of the world make the US and Canada highly desirable for these investments and I expect to see a consistent flow from the Chinese and other nationalities in both countries.”