Monday,  August 8, 2022  1:18 pm

Choice Hotels to acquire Radisson Hotel Group Americas for $675M

  • Hotels
  •   06-13-2022  10:08 am
  •   Pax Global Media

Choice Hotels to acquire Radisson Hotel Group Americas for $675M
(File photo)
Pax Global Media

Choice Hotels International and Radisson Hotel Group have announced that Choice Hotels has entered into a definitive agreement to acquire the franchise business, operations and intellectual property of Radisson Hotel Group Americas for approximately $675 million (USD)

The deal, announced Monday (June 13), which involves Radisson's nine hotel brands in the Americas, is the latest chapter in Choice's growth strategy. 

The added 624 hotels with over 68,000 rooms expand Choice Hotels' presence in the upscale and core upper-midscale hospitality segments, particularly in the West Coast and Midwest of the United States.

The acquisition extends Choice Hotels' customer reach in the upscale segments, as well as to more business travellers and a broader demographic within Choice's core leisure segment, according to a press release. 

The combination strengthens Choice's ability to "provide a more holistic product offering across segments" and continue to capitalize on consumer trends expected to fuel future demand for travel such as remote work, increasing retirements and road trips.

The transaction brings Choice's RevPAR (revenue per available room) growth performance to a new set of franchisees and hotel investors and provides new opportunities to expand its presence to additional locations in CanadaLatin America and the Caribbean

The Radisson brands typically have larger room counts and are located in higher RevPAR markets, driving higher royalty revenue per hotel.

"Choice has a well-established history of smart acquisitions in new segments where our world-class franchising engine can spur future growth," stated Patrick Pacious, president and CEO of Choice Hotels. "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."

The transaction also unlocks significant potential value for the Radisson brands in the Americas. 

Choice Hotels has a deep familiarity with the Americas franchisee community and will bring a strong commitment to driving the success of Radisson franchisees, many of whom already have franchise agreements with Choice Hotels.    

"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," Pacious said. 

Federico J. González, CEO of Radisson Hotel Group, added: "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."

The transaction has been unanimously approved by Choice Hotels' Board of Directors and is expected to close in the second half of 2022, pending regulatory approvals and customary closing requirements.

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