Sonesta Acquiring Red Lion Hotels

LOL - “won’t be making any Knights Inn mattress runs anytime soon.” That’s some shade but the truth hurts sometimes!

I'd disagree and say somewhere like Knights Inn would be the perfect place to mattress run. If they ever run a promotion like "stay 2 times and get a free night," I would love to check in 2 times at my local Knights Inn (not staying there overnight, of course) for $50/night, and get a free night at a Royal Sonesta five star hotel.

A novel design: Building rooms above the lobby drive through ... and making them half a floor higher than the rest of the hotel. For loyalty program members this scream upgrade!

This does sound like a Norwegian Air and Wow Air scheme to me, go big or go broke. It has failure written all over it, hopefully they know what they are doing.

I wonder if Sonesta will make some investment for renovations. The Red Lion in Appleton, WI (was a Radisson) has great potential, but it is need of an upgrade.

@ Steve -- Keep in mind that Red Lion operates under a franchise model, so that will probably limit the extent to which properties can be forced to renovate.

@ JW -- Hah, yes and no. The difference between the airline and hotel industry is that hotel groups only have management or branding contracts, rather than actually owning all their properties. That's quite different than airlines, which own most of their planes, etc. Sonesta is likely just taking a cut on revenue for individual properties, so downside is relatively limited.

@ James -- Fair, though how many "five star" Sonesta properties are there really?

That bottom tier of hotel does have a use when you are traveling through the remote portions of the country. And the reality is, the ex-Candlewood Suites properties aren't really that much higher than Knights Inn anyway.

@ Ben,
It is splitting hairs but, major airlines operate most of their flights on airframes that are leased. In the long run your point remains valid, the airlines still operate their flights which is unlike the lodging contracts.

This is an interesting investment situation. The small hotel/motel REIT is making a major, aggressive stab of the market situation. Who is the "Whale" that is financing this transaction? Is somebody is betting on the come of this throw of the dice?
Believe me, this investment has been well researched by more than a few accounting eggheads, and their recommendation is (1) "Roll with it Baby" or...
(2) "If I could stick my pen in my heart
And spill it all over the stage"
OK, the last recommendation was over the top; but I couldn't help from using another Rolling Stone lyric.
This is the world of income producing assets in Capitalism. If these businesses cannot produce happy customers, and then produce profits, then the "pooch has been screwed".

BTW,
Has anyone looked at the share price of SVC. Sunk faster than the the Titanic or maybe the NFC East.
Hail Mary

A little off Topic here: I opened my First WOH account in December, received 5 nights, a couple of nights later 5 more nights,had 10 nights till the 31st December, checked today account only had 5 nights that were awarded this year. Contacted Hyatt, they suggested I contact Chase. huh? I should have 15 nights according to OMAAT Blogs, Right?

Ben, have you ever stayed at a Sonesta property
I would like you to do a review

Aside from Drury hotels, I dont think there are any other fully corporate owned hotel chains in the U.S. Enter 'consistent inconsistencies' in too many instances...
That being said, my experiences at Sonesta properties have been far superior to the regurgitated locations with my RLH stays. This may be the kick in the butt needed for improvement.

Will sonesta require rebranding of red Lion properties?

I'm a housekeeper at a Red Lion in Coos Bay, Or.97459. The new owner is making the Red Lion look bad. he pays his employees minimum wage and treats them very bad. We don't have red lion quality stuff it is all cheap and we barely have enough linen to do the rooms every day we have to wait for the laundry person to wash linen we only have 1 washer. he is too cheap to fix the big one. so, it's very hard on the housekeeper's they should be getting paid more. they only have 9 housekeepers. He wants all the rooms open so sometimes them are there till 9pm. They have a brown paper sack breakfast. he is supposed to have a buffet breakfast for the price of the rooms. No coffee in lounge, every customer asks if we have coffee in lounge. The customers always say that they won't be coming back. This employer is making Red Lion's name look really bad. Somebody needs to9 come helps us housekeepers or were going to be out a job h4e is running this motel down. Sonesta please help Red Lion Coos Bay, Oregon