Choice Hotels International and Radisson Hotel Group have entered into a definitive agreement for Choice to acquire the franchise business, operations, and intellectual property of Radisson Hotel Group Americas, which include nine hotel brands.
The US$675 million purchase signifies Choice Hotels’ strategic growth in the region, particularly the US, while Radisson turns its attention to EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific).
What the deal means:
• Unites highly complementary businesses, adding nine brands, 624 hotels and over 68,000 rooms to the Choice Hotels roster
• Marks the latest step in Choice’s strategy of growing its asset-light portfolio of hotel brands in higher revenue travel segments and locations
• Extends Choice’s customer reach with some of the industry’s most recognized brands
• Enables Radisson Hotel Group to continue growing and managing Radisson business in EMEA and APAC
Choice says the addition of Radisson’s hotels in United States, Canada, Latin America and the Caribbean – 10 Radisson Blu hotels, 130 Radisson hotels, 9 Radisson Individuals, 1 Park Plaza hotel, 4 Radisson RED hotels, 453 Country Inn & Suites by Radisson and 17 Park Inn by Radisson hotels, as well as the Radisson Inn & Suites and Radisson Collection brands – is the latest chapter in its successful strategy to expand its growth opportunities by bringing the company’s best-in-class franchising platform to adjacent hotel segments and to a new set of hotel owners.
It notably expands 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 of some of the industry’s most recognized brands 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,” says the company, adding, “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 Radisson brands typically have larger room counts and are located in higher RevPAR markets, driving higher royalty revenue per hotel, adds Choice, which says it will independently own and control the brands in the Americas and will work with the Radisson Hotel Group to drive the growth and continuity.
The transaction is also expected to unlock significant potential value for the Radisson brands in the Americas as 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.
Radisson Hotel Group, meanwhile, says it will continue its commitment to the global success of the Radisson brands and expanding the overall footprint of its global operations, with the aim of doubling its portfolio in EMEA and APAC by 2025.
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.