Choice completes integration of Radisson portfolio early
As a result, the company achieved $80 million in ‘recurring synergies’
By Vishnu Rageev RJul 14, 2023
CHOICE HOTELS INTERNATIONAL has streamlined its business by integrating the Radisson Hotels Americas portfolio into its franchisee system. The company expects more than 10 percent adjusted EBITDA growth in 2024.
“Choice exceeded synergy targets, achieving around $80 million in recurring synergies,” the company said. “The company successfully turned around Radisson Hotels Americas in 2022 and is poised to surpass projected EBITDA contributions, exceeding $60 million in 2023 and growing beyond $80 million in 2024.”
The company anticipates more cost and revenue opportunities in the future.
“Newly added hotels within a brand yield an average of 20 percent higher royalty revenue compared to exiting hotels,” it said. “The company achieved an average of over four hotel openings per week, totaling 107 openings as of June 30, 2023. This marks a 39 percent increase compared to the same period in 2022, fueled by a 45 percent rise in conversion hotel openings and a 24 percent increase in new construction hotel openings.”
In the first half of 2023, the company experienced year-over-year growth in hotel openings across all segments. Openings in the upscale segment increased by 83 percent, the midscale segment by 42 percent, the extended stay segment by 50 percent, and the economy segment by 11 percent.
During Asian Hospitality’s exclusive Leadership Series interview filmed during the company’s annual conference in April, Pat Pacious, president and CEO of Choice Hotels International, said the company had been working closely with Radisson Hotel Group on the transition.
“The sellers of the brands in the Americas, they picked us. They chose Choice Hotels because of the stewardship we’ve shown with our existing brands, and also our ability to grow brands,” Pacious said. “We are in partnership with them on the sort of global brand standards and logos and those types of things to maintain some consistency at that level, but allowing for the development in this particular market. If brands need to shift somewhat to attract the right developer. It gives both of us the flexibility to do that.”
Pacious also discussed the organization's partnership with AAHOA, expressed opposition to proposed fair franchising legislation in New Jersey, and emphasized the continued significance of Asian hoteliers to the company.
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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