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Red Lion Hotels Corporation recently announced that the company has signed franchise license agreements with the owner of two New Mexico hotels. The company will open two locations in New Mexico through the conversion of existing Best Western properties in Farmington and Gallup.

The two properties are currently owned by Positive Investments, Inc, which is also the owner of the Red Lion Hotel Oakland International Airport in Oakland, California. The 192-room Red Lion Hotel Farmington is located in New Mexico while the other property, Red Lion Hotel Gallup, is located near Albuquerque.

This transaction will enhance the Red Lion brand and also marks the company’s entry in the New Mexico market. With the strength and support of the Red Lion Brand, the company is expected to  boost its quality and customer satisfaction.

Red Lion Hotels Corporation is a hospitality and leisure company primarily engaged in the ownership, operation and franchising of mid-scale hotels under its Red Lion brand. As of June 30, 2011, the RLH hotel network comprised 44 hotels located in 8 states and 1 Canadian province, with 8,457 rooms and 424,387 square feet of meeting space.

Red Lion currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Intercontinental Hotels Group plc (IHG - Snapshot Report) also holds a Zacks #2 Rank.

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