More Choice 

Choice Hotels International is to add nine brands and minus $675m with the acquisition of Radisson Hotel Group Americas.

Choice CEO Pat Pacious has never been quiet about wanting to buy more brands – you don’t get coy comments about building organically the like of which one hears at Hilton. In May Pacious told investors “we’ve always looked at tuck-in acquisitions, we look for opportunities where we have white space in our portfolio”.

Given that the deal was chuntering along at that time, it’s not a great tea leaves moment. But given that Pacious says this pretty much every quarter, it tells you a bit about his mindset.

But back to that in a moment. First off, does this mean – as we who like a bit of excitement in our hotel gossip – that we are now, finally, going to see gallons of mergers coming our way? Well Pacious was talking about international deals, so maybe another from Choice, but in terms of the much-lusted-after Marriott/Accor merger? Probably not. 

Marriott’s Tony Capuano did mutter to Goldman Sachs last week about how much he anticipated “a meaningful acceleration of select service growth outside the US and Canada”. And what quicker way to deliver that than with Accor? So hope springs, but probably not.

To Choice, of which there is now more. The deal adds 624 hotels with over 68,000 rooms to expand Choice Hotels’ presence in the upscale and core upper-midscale hospitality segments, particularly in the West Coast and Midwest of the US. There’s not a great deal of gold and marble, but this will cock a snook to those who look down on Choice as cheap. 

As for Radisson’s side? As we have seen for some time in Europe with the group’s agreement with PPHE, it is less precious about its brands than many, taking a mature parent approach to letting them spread their wings and trusting their own judgements rather than clipping on an AirTag. 

For Choice, which now has 22 brands (at least), it’s not quite at the Accor level, but it’s heading that way. But it’s not this which makes Choice more interesting and, potentially, more future proof than most.

Choice has, as we’ve said, tended to be looked down on a bit by the other hotel groups because of its portfolio, but also because of its devotion to franchising, which looks a bit ‘businessy’, and not so much like hospitality, where the CEOs like to talk more about experience and stays and how lovely the new infinity pool is.

Choice has always been more, well, direct about who it is. It’s about delivering heads on beds. Because it’s franchised, it can slap on a new brand for every new segment in record time – as it did with extended stay in the pandemic. It invests in technology. It is unabashed about being for the hotel owner.

This approach puts it at odds with many of the other large branded companies, which tend to shy away from being so overt. Yet many of them profess to want to move to fee-driven businesses. To do this – and to end the moaning about not being valued properly by the stock market – they need to deliver a clear, unfettered product. 

This can either be a recognisable consumer-driven brand stable – and they’re nowhere near that or shown any inclination to want to get there – or they can be more like Choice, which, if it was into restaurants, would have three different bubble tea brands or whatever the youth is into this week. 

Your Choice. 

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