Choice Hotels International has agreed to buy Radisson Hotel Group Americas for $675 million, the company announced Monday. The move will bring nine new brands and 624 properties into the Choice portfolio, which until now mostly has played in the budget to midprice arena with brands like Clarion, Comfort, Econo Lodge and Quality Inn. The brand in recent years has reached aggressively into the upscale segment with Cambria Hotels & Suites, targeted to business travelers and the expansion of which the company last fall called a "strategic, long-term priority. "
Acquiring Radisson extends that strategy, adding 68,000 rooms to the Choice portfolio and instantly establishing presence in the upper-upscale segment with properties like Radisson Blu and Radisson Red along with the upscale Radisson and boutique "lifestyle" brand Radisson Individuals. The acquisition also will extend Choice’s footprint in the midscale tier, with the vast majority of the acquired portfolio flying the Country Inn & Suites by Radisson and Park Inn by Radisson flags.
The Radisson Americas portfolio will bring larger properties to the Choice brand, along with an expanded footprint in key U.S., Canadian, Latin American and Caribbean markets that traditionally have driven higher occupancies and higher revenue per available room. These include more urban business travel destinations as well as beach resorts that tap into remote work and “bleisure” travel trends that are driving new strategy decisions at a number of major international hotel brands.
"Choice has a well-established history of smart acquisitions in new segments where our world-class franchising engine can spur future growth, " said Choice president and CEO Patrick Pacious in a press statement. "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."
Radisson set the stage for a clean acquisition when last summer it separated its business into Radisson Hotels and Radisson Hotels Americas, ostensibly divorcing the Americas business from any operations or data sharing that could involve Jin Jiang International. It since has run a separate loyalty program and operated on a different management tech stack from the EMEA and APAC portfolio. The current leadership has aggressive plans to grow the Radisson brands in those regions.
"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," said Radisson Hotel Group CEO Federico González in a statement. "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."
The acquisition plan was approved unanimously by Choice Hotels' board of directors and is expected to close in the second half of 2022, pending regulatory approvals and customary closing requirements, according to the company.