Very big news just came out of the hotel industry recently and I have to admit the news came as a bit of a surprise. Join us today as we discover the headlines, break down the news and give our thoughts on it.
The Big News:
In this very shocking news, Choice Hotels announced it was acquiring Radisson Hotel Group Americas for a sum of $675M. Currently, Choice Hotels has the following brands in its current portfolio prior to this transaction:
The deal, once closed, includes nine brands, 624 hotels and over 68,000 rooms!
For those unfamiliar with the Radisson brand or Radisson Hotel Group (RHG), it emcompasses all franchised, operations and branding of the Radisson Hotels throughout the U.S., Canada, South America as well as the Caribbean. RHG also includes 10 Radisson Blu hotels, 130 Radisson hotels, nine Radisson Individuals, one Park Plaza hotel, four 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.
Thoughts & Reactions:
Overall, this is definitely a bold move for Choice Hotels. Earlier in the year a few rumors were going around saying Choice was looking to drop some serious cash to expand into the luxury and higher tiered hotel market. I think one primary reason for doing this merger is smart, is by doing so you can compete with Wyndham Hotels & Resorts. Wyndham, like Choice, has economy brands, extended stay but Choice lacked many things that Wyndham had. Those being luxury brands, upper-mid scale brands and resorts. Can they compete with Wyndham and overall be at the same level or better? Only time can tell.
With this merger to close in 2022, there are still many loose ends and questions left to be answered. Here are some of the top few questions and concerns that come to mind:
With Radisson under Choice Hotels, will standards for Radisson drop? Get better? Or stay the same?
Personally, I’m not sure how this will turn out for Radisson and their nine brands. While I feel like this a good move since they will expand and get more exposure, I feel like with how Choice operates some of their brands, I can’t help but feel standards may slip. Then again, with acquiring nine strong brands and a few luxury brands in the mix, maybe this will make Choice stronger and in turn help them. Only time will tell how this plays out.
Will the Radisson Rewards/Loyalty program be combined with Choice Privileges?
Radisson Rewards is not as well known or as large as Choice Privileges. With that being said, I can definitely see one of two things happening. Choice takes Radisson Rewards and merges it with Choice Privileges to make one cohesive rewards system that is easily utilized across all brands. The other thing I can see is Radisson Rewards stays around and is overhauled and works together with Choice. They would promote both together, be able to transfer points between the two and redeem member only offers for both. While that may seem like a lot of work, I think that makes the most sense. (And we’ll see why with our next question).
With the European operations still under Radisson and not being sold, will this cause confusion and inconsistencies from the American operations?
Anytime you have split operations across the globe, it’s always a challenge logistically keeping supply chains, standards, operations and finances on track. However in this case, this transaction makes it interesting and creates a tough challenge. If Choice makes changes to Radisson, they only have control over the American/North American division. I think there are definitely going to be some tough challenges that both Choice and the European/Asian division of Radisson will need to figure out. I find it very odd how you would sell off half of your brand then keep the other half. It’s just so hard to wrap your head around.
I definitely think this merger took a lot of people by surprise. As mentioned above, we did hear rumors earlier in the year about Choice looking to buy but, those rumors only mentioned purchasing one or two induvial brands not an entire hotel company. I honestly did not expect that either. Regardless I think over the next few months and years, we’ll have to see how this plays out for both sides. What do you think about the Choice Hotels and Radisson Hotel Group merger?
Touristician 