In order to expand its footprint in the domestic market, Spokane, Wash.-based hotelier, Red Lion Hotels Corporation (RLH - Snapshot Report), recently inked two license development deals with franchisees in California. As per the agreement, the company will unveil two Red Lion-branded properties in Greater Los Angeles area. Financial terms of the deal were not disclosed.
Red Lion has penned the first deal with LFA Hotels for rebranding Ayres Grand Boutique Suites in Ontario. The 107-room property is strategically positioned at 204 N Vineyard Avenue and lies in proximity to downtown Los Angeles.
The company’s second deal is with Best West LLC for converting the former Holiday Inn Express Perris-East hotel in Perris. The 107-guestroom property will become Red Lion Inn & Suites Perris post the refurbishment. This property, strategically positioned at 480 S Redlands Ave, will be unveiled within the next two months.
Management at Red Lion believes that the location of the properties will complement and highlight its brand better. California, a popular tourist destination for both domestic and overseas visitors, makes tourism an important aspect of its economy. Presently, Red Lion has seven properties in the state. Further, with these additions, Red Lion will be able to enhance its portfolio in the South California market.
Red Lion is highly concentrating on increasing its franchise activities. The franchising business is capital efficient as the owner/developer partners provide the capital and the company then earns a fee for managing/franchising the hotel. The company expects to add at least 30 to 40 franchised hotels by 2014.
Some other hoteliers worth looking at the current level include Hyatt Hotels Corporation (H - Snapshot Report), China Lodging Group, Limited (HTHT - Snapshot Report) and Marriott Vacations Worldwide Corp. (VAC - Snapshot Report). All these companies carry a Zacks Rank #2 (Buy).