How This Lodging Company Has Grown by As Much As 1,970 Percent Over the Past Year

The year 2020 was not exactly one which lodging companies — or for that matter, many business entities and individuals in general — celebrated chiefly due to the current 2019 Novel Coronavirus pandemic…

How This Lodging Company Has Grown by As Much As 1,970 Percent Over the Past Year

…but one lodging company has been experiencing a phenomenally dramatic spurt of expansion within the past six months from having 77 hotel and resort properties in its brand portfolio back in August of 2020 to boasting almost 1,200 hotel and resort properties by the time its latest deal is done — and that translates to an increase of almost 1,460 percent.

Sonesta International Hotels Corporation started the year 2020 as a manager of only 58 hotel and resort properties under three brands in the United States — meaning that its growth in one single year is almost a whopping 1,970 percent.

The acquisition of RLH Corporation — which is the parent company of Red Lion Hotels — for approximately $90 million means that Sonesta International Hotels Corporation will experience the largest expansion in its history with the addition of greater than 900 hotel and resort properties. The transaction of the acquisition is currently expected to close sometime during the first half of 2021.

RLH Corporation is currently the tenth-largest hotel franchise company which is based in the United States — but due to the 2019 Novel Coronavirus pandemic, the lodging company had been experiencing financial issues, as additional cost reduction measures were announced earlier in the RLH Corporation Investor Update on Thursday, April 2, 2020 as part of an accelerated cost-cutting program, which included:

• Reducing its workforce by roughly 40 percent to approximately 100 full-time equivalent employees, which was part of the cost cutting measures that began in late 2019 and had since been accelerated. The reduction in force and affiliated severance expense totaled $0.6 million.
• All associates throughout the lodging company had accepted and taken reductions in salary, with compensation cuts between five percent and 25 percent. Members of the board of directors took a 25 percent reduction in base retainer for the second quarter of 2020.
• The Spokane office was closed and successfully sub-leased its surplus office space in Denver as part of a consolidation of operations. Cost savings related to the reduction of office space are an estimated $0.3 million for the remainder of 2020 and $0.5 million on an annualized basis.
• Reducing capital expenditures for 2020 to include only essential projects for an estimated savings of $2.9 million and a reduction in additional key money commitments during this challenging economic time.

Other Acquisitions of Hotel and Resort Properties Within the Past Six Months By Sonesta International Hotels Corporation

Back on Wednesday, October 7, 2020, Sonesta International Hotels Corporation — which is based in Newton, Massachusetts and claims to be one of the fastest growing hospitality companies in the United States — benefited from what has been called an “uncured default” of 122 hotel properties by Marriott International, Incorporated to Service Properties Trust, which is a real estate investment trust company that claims 1,138 total properties in its portfolio.

Due to the termination of the agreement between Service Properties Trust and Marriott International, Incorporated — which are also known as SVC and Marriott respectively — management of nine of the affected hotel properties was transitioned by Sonesta International Hotels Corporation on Tuesday, December 15, 2020; and the remaining 89 hotel properties will be transitioned on or about Sunday, January 31, 2021.

In addition to the acquisition of two full service hotel properties, 40 extended-stay hotel properties, and 56 select-service hotel properties in the United States, Sonesta International Hotels Corporation is experiencing the third-largest expansion in its history — only to be exceeded by the acquisition of 103 hotel and resort properties from InterContinental Hotels Group via similar circumstances.

RLH Corporation: The Most Confusing Lodging Company in America 2019

“Only three results seem to appear when searching on BoardingArea for articles pertaining to this lodging company — with none at all written about its frequent guest loyalty program — and yet it is growing, as it has acquired its fifteenth brand recently.”

That was the opening paragraph to this article posted here at The Gate on Saturday, April 7, 2018 pertaining to RLH Corporation — along with its Hello Rewards frequent guest loyalty program. Its legacy brand is Red Lion Hotels — hence, the RLH — whose first property opened in 1959, although it traces its beginnings all the way back to 1937.

In the increasingly turbulent landscape of the hospitality industry — which has been undergoing the ironically divergent effect of expanding brands while simultaneously contracting the number of corporations — sits an entity of its own volition, which quietly acquired a hodgepodge of hotel properties in a collection of brands which are loosely tied together with a program designed to reward its loyal customers with a small assortment of benefits.

Red Lion Hotels was briefly a brand of Hilton Worldwide as a result of its acquisition of Promus Hotel Corporation for approximately $4 billion in cash and shares of stock in October of 1999, which included assets such as the Doubletree, Homewood Suites, Hampton Inn and Embassy Suites brands. The result of the combined company was almost 1,700 hotel and resort properties — which is considered paltry today when compared to currently boasting greater than 5,760 hotel and resort properties worldwide.

Members of what was then known as the Hilton HHonors frequent guest loyalty program could earn and redeem points at Red Lion Hotels, whose properties were located primarily throughout the western third of the United States.

The association of Red Lion Hotels with Hilton was short-lived: in 2001, the brand was acquired by WestCoast Hospitality Corporation, whose name changed in 2005 to Red Lion Hotels Corporation, which was shortened to the current RLH Corporation name.

“The acquisition of Knights Inn enhances RLH Corporation’s position as one of the 10 largest hotel franchisors in the world,” according to this official press release from Wednesday, April 4, 2018, which announced that RLH Corporation “has entered into a definitive agreement to acquire the Knights Inn brand from Wyndham Hotel Group, LLC a subsidiary of Wyndham Worldwide (NYSE:WYN) for an aggregate price of $27 million cash, subject to certain post-closing adjustments.”

The portfolio of eight brands of RLH Corporation — at least, what appears here — include:

• Hotel RL — At the heart of each of the seven hotel properties of this unique concept is The Living Stage, a platform for local musicians, poets, authors, artists, community leaders and activists to share their message live and up close — as well as an “open lobby, mobile check-in, free Wi-Fi, bikes to borrow, board games and a few extra surprises.”
• Red Lion Hotels is an affordable lodging option which has since expanded its footprint to include a number of hotel properties in Texas and the eastern third of the United States.
• Red Lion Inn and Suites — Calling this a separate brand may be a stretch, as no explanation is given as to the difference between this brand and the legacy Red Lion Hotels brand.
• Signature Inn combines modern conveniences in a retro concept designed to harken back to the golden era — presumably of the 1950s, with doo-wop music playing in the lobbies of the two hotels in Wisconsin and California.
• GuestHouse offers “a dependable and fresh stay” with “friendly service, spotless rooms and unbeatable value” for both business and leisure travelers.
• Knights Inn is a concept for guests who like to travel simply and casually with no fancy frills; no add-ons, no nonsense with “a place to lay your head at night, clear of any hidden charges or more choices than you need.”
• Americas Best Value Inn — The glaring absence of an apostrophe in the brand name notwithstanding, this budget brand has the most properties in the brand portfolio of RLH Corporation in every state in the United States except for Delaware, Vermont, Hawaii and New Hampshire; and no locations within the District of Columbia either.
• Canadas Best Value Inn is basically the Canadian version of Americas Best Value Inn with 26 hotel properties in four provinces and one territory — complete with the aforementioned missing apostrophe.

Sonesta Travel Pass

The frequent guest loyalty program of Sonesta International Hotels Corporation is known as Sonesta Travel Pass; and it includes two elite status tiers in addition to basic membership: Preferred, which you can earn in as few as six eligible nights; and Elite, which you can earn in twelve eligible nights.

Being a member has some interesting benefits:

• Earn ten points for every dollar spent on a qualified room rate at participating locations.
• Earn a free night in as few as 15,000 points earned.
• Members of Sonesta Travel Pass always save five percent as a discount on room rates.
• No blackout dates. Ever.
• Complimentary upgraded internet access on every stay.
• Exclusive member offers just for signing up as a member of Sonesta Travel Pass.
• Earn top tier elite status in only twelve nights.
• Elite status match from the frequent guest loyalty programs of other lodging companies.
• Get the best price guarantee when you book at the official Internet web site of Sonesta International Hotels Corporation.

Hello Rewards Program

Not much specific information is given pertaining to the Hello Rewards loyalty program — yet another loyalty program whose name includes the word rewards and to date still has no discussion dedicated to it on FlyerTalk — other than it being “a way of saying ‘Thank You’ to our loyal guests” and that members will “receive plenty of personal touches and extra perks when you stay at our hotels.”

No mention of any details of the integration of the Hello Rewards and Sonesta Travel Pass frequent guest loyalty programs have been announced at the time this article was written.

Perks and benefits of Hello Rewards — which was launched on Monday, December 15, 2014 — include:

• A free night for every seven revenue stays
• Hello Rewards special room rate
• Express check-in and check-out
• Late check-out — when available
• Room upgrades — when available
• Offers exclusive only to members of Hello Rewards

Summary

As a result of taking advantage of depressed areas of the lodging industry, Sonesta International Hotels Corporation will become one of the largest hotel companies in the United States with approximately 1,200 hotel and resort properties in diversified brands across multiple market segments…

…and it may not be done growing yet — but some questions do come to mind: is the lodging company growing way too fast? Can it handle the responsibilities which come with such an expansion? Will the frequent guest loyalty program change in any way to reflect that growth? How will the competition react?

Only time will tell…

All photographs ©2020 by Brian Cohen.