This under-the-radar hotel chain is one to watch in 2021
This year has changed much about what we'd come to hold true about the travel industry over the last several years.
Airlines have shrunk dramatically and added point-to-point flights to meet flyers where they want to go: primarily warm-weather beach destinations and mountain destinations in the west where space isn't hard to come by.
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Hotel chains have been forced to rethink the guest experience. And, many closed temporarily for many months while others will never reopen.
Across the board, though, travel companies have faced a cash crunch as they've never experienced before, and that's had some interesting consequences -- some with particular relevance to the points-and-miles world.
One direct result of the coronavirus pandemic is that one former lightweight hotel chain (at least in the U.S.), Sonesta International Hotels Group, now deserves your attention. But why should you care about this relatively unknown hotel chain?
Because the Boston-based hotel company announced Dec. 30 it is acquiring RLH Corp., the parent company of Red Lion Hotels and Americas Best Value Inn budget chains in a deal valued at $90 million. Sonesta gets nearly 1,000 hotels across North America, which would make it one of the largest hotel companies in the U.S. with approximately 1,200 properties.
Sonesta began 2020 managing 58 hotels under three brands in the U.S: Sonesta, Sonesta ES Suites and Sonesta Simply Suites. Upon the completion of hotel conversions previously announced and the acquisition of RLH, Sonesta will become one of the largest hotel companies in the U.S., with approximately 1,200 hotels under 13 brands in multiple market segments. When this deal is completed, RLH will move ahead of Hyatt, which currently has more than 950 hotels in its portfolio.
Some chains have fallen behind on certain revenue payments to hotel owners due to the coronavirus pandemic, and at least one ownership group has taken drastic action by transitioning over 100 formerly IHG-branded properties and planning to do the same with almost 100 Marriott-branded hotels to the Sonesta family.
Service Properties Trust (SVC), which owns hundreds of hotels across North America, reflagged the 103 former IHG properties as Sonesta hotels in November 2020, and is poised to reflag 98 Marriott-branded properties at the end of January 2021, as reported by hotelmanagement.net.
SVC owns a total of 122 Marriott-branded properties, and it plans to sell 24 of those, leaving 98 hotels, which are distributed among the Marriott, SpringHill Suites, TownePlace Suites, Residence Inn and Courtyard brands.
According to hotelmanagement.net, the new Sonesta properties will fall under its Royal Sonesta, Sonesta, Sonesta Select and Sonesta ES Suites brands.
By the end of the first fiscal quarter of 2021, Sonesta expects to have more than 1,200 hotels across the United States, thanks in no small part to its taking over of the former IHG properties, the forthcoming transition of the 98 Marriott hotels and the RLH acquisition of Red Lion Hotels and Americas Best Value Inn.
With Sonesta growing its footprint significantly in the U.S., it's going to be hard to ignore this often-overlooked chain. With its takeover of dozens of former RLH, IHG and Marriott properties, Sonesta will not only have a presence in the ubiquitous select-service market but also the higher-end space, thanks to its takeover of several formerly Kimpton and InterContinental hotels.
And despite being a relatively small player in the hotel industry, Sonesta has a loyalty program called Travel Pass, complete with elite-status tiers and the ability to earn and redeem points for stays.
With Sonesta expanding big time in North America -- and the U.S. specifically -- chances are you'll soon find yourself booking a night at one of its newly acquired properties across the country, whether you're staying for a night off the interstate or a multi-night stay at a luxurious city-center hotel.
Additional reporting by Benét J. Wilson
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