Choice Hotels buys out Radisson’s American arm

by | 27 Jun 2022 | Chains

Imagery courtesy of Choice Hotels.

Choice Hotels International is to acquire Radisson Hotel Group Americas, bringing nine brands, 624 hotels and over 68,000 rooms under its umbrella.

The $675 million deal marks the latest step in Choice’s strategy of growing its asset-light portfolio of hotel brands in higher revenue travel segments and locations.

Upscale boost

The agreement encompasses the franchise business, operations and intellectual property of Radisson Hotel Group Americas, boosting Choice Hotels’ presence in the upscale and core upper-midscale hospitality segments, particularly in the West Coast and Midwest of the United States. It also gives the group access to more business travellers and a broader demographic within Choice’s core leisure segment.

Choice believes the combination strengthens its ability to provide a more holistic product offering across segments and continue to capitalise on consumer trends expected to fuel future demand for travel such as remote work, increasing retirements and road trips. It is also eyeing international expansion in Canada, Latin America and the Caribbean.

Complementary businesses

Patrick Pacious, president and CEO of Choice Hotels, said, “Choice has a well-established history of smart acquisitions in new segments where our world-class franchising engine can spur future growth. This transaction brings together two highly complementary businesses, enhancing our guest offerings in the core upper-midscale hospitality segments, while extending our reach into the upper upscale and upscale full-service segments and in higher revenue geographic markets. We are confident that guests and franchisees will significantly benefit by combining these two exceptional sets of brands.”

He continued: “Our long track record of establishing mutually beneficial relationships with our franchisees has resulted in a best-in-class voluntary retention rate, and those franchisees are the source of a majority of our new hotel development. Our existing and new hotel owners will benefit from the improved business delivery capabilities of the combined companies, including our award-winning loyalty program, proprietary tools and emerging technologies that will enable them to capture more business, lower their hotel operating costs, reach new customers and respond to evolving industry trends.”

Long-term strategy

According to Federico J. González, CEO of Radisson Hotel Group: “Since the introduction of our strategic transformation plan in 2017, Radisson Hotel Group has been committed to the global success of the Radisson brands and expanding the overall footprint of our global operations. We have achieved strong results, doubling the number of rooms signed per year in EMEA and APAC, confirming Radisson Blu as the largest upper-upscale brand for over 10 years and establishing Radisson as the upscale brand with the largest growth in EMEA.

“We are confident that Choice Hotels is the owner with the right long-term strategy, resources and management team to successfully accelerate the growth of the Radisson business in the Americas. Radisson Hotel Group will continue to leverage the strength of operational excellence to set our business in EMEA and APAC on a significant growth path with the aim of doubling the portfolio in those markets by 2025. Together with Choice, we will work to ensure that customers continue to experience the highest levels of service and a superior brand experience.”

Tom Buoy, interim CEO of Radisson Hotel Group Americas, added: “Our associates have been working hard to solidify the power of our brands, build a better commercial engine and offer best-in-class solutions to franchisees and customers. We are very pleased that the Radisson family of brands in the Americas will join Choice Hotels. We believe that this acquisition will drive growth in a highly competitive market and enable stronger performance for our franchisees.”

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