Red Lion Hotels Corporation, doing business as RLH Corporation, operates as a hospitality and leisure company the United States. The company engages in the franchising, management and ownership of hotels under various proprietary brands.
The company’s brands include Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, GuestHouse, Settle Inn, Americas Best Value Inn, Canadas Best Value Inn, Signature and Signature Inn, Knights Inn, and Country Hearth Inns & Suites.
Segments
The company operates t...
Red Lion Hotels Corporation, doing business as RLH Corporation, operates as a hospitality and leisure company the United States. The company engages in the franchising, management and ownership of hotels under various proprietary brands.
The company’s brands include Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, GuestHouse, Settle Inn, Americas Best Value Inn, Canadas Best Value Inn, Signature and Signature Inn, Knights Inn, and Country Hearth Inns & Suites.
Segments
The company operates through two segments, Franchised Hotels and Company Operated Hotel.
Franchised Hotels
This segment engages primarily in licensing the company’s brands to franchisees. This segment generates revenue from royalty, marketing, and other fees that are primarily based on a percentage of room revenue or on room count or on transaction count and are charged to hotel owners in exchange for the use of its brand and access to its marketing and central services programs. These central services and marketing programs include the company’s reservation system, guest loyalty program, national and regional sales, revenue management tools, quality inspections, advertising and brand standards. Additionally, this segment includes the company’s initial direct contracts for Canvas Integrated Systems.
As of December 31, 2019, the company’s network of hotels included 1,056 hotels under franchise agreements, representing approximately 66,700 rooms. It is growing its franchise network of hotels through execution of franchise agreements with hotel owners and through acquisitions of hotel brands and/or companies.
In May 2018, the company acquired the Knights Inn brand and related franchise agreements for approximately 330 hotels operating under the brand.
Company Operated Hotel
This segment derives revenues primarily from guest room rentals and food and beverage offerings at owned and leased hotels for which the company consolidates results. Revenues have also been derived from management fees and related charges for hotels with which the company contracts to perform management services, however its last management agreement terminated in February 2019.
In December 2019, the company sold an additional RL Venture LLC (RL Venture) property.
In November 2019, the company sold the only hotel in its consolidated joint venture (JV), RLS Atla Venture LLC. Majority of the buyers entered into franchise license agreements to retain the Red Lion brand.
The company operated six hotels, as of December 31, 2019. These include one wholly owned hotel, two hotels owned or operated under a land lease through JV entities, and three hotels operated under land and/or property leases held directly by the company.
The company’s Baltimore Hotel RL became a wholly owned hotel in 2018. Previously, the hotel was held in its own JV entity, RLS Balt Venture, LLC, of which the company owned 73%, until it purchased the remaining noncontrolling interest in October 2018.
As of December 31, 2019, the company’s Hotel RL Olympia hotel is the only remaining property held in RL Venture, of which it owns a 55% interest. In 2019, the company sold the Hotel RL Salt Lake City, a property previously held in RL Venture.
Also, as of December 31, 2019, the company’s Washington DC Hotel RL is held in its own JV entity, RLS DC Venture, LLC, of which it owns 55%.
In 2019, the company sold its Red Lion Hotel Atlanta Airport hotel. The property was previously held in its own JV entity, RLS Atla Venture, LLC, of which it owns 55%.
The company has leasehold interests in its Anaheim, Seatac, and Kalispell hotel properties. These leases have expiration dates in 2021, 2024, and 2028, respectively. The Anaheim lease has 17 five-year renewal options remaining and the Kalispell lease has three five-year renewal options remaining.
Strategy
The company’s strategy prioritizes getting ‘back to basics’ with a renewed commitment to franchisees and a tactical focus on growth opportunities. Its strategy for its midscale hotel brands is to identify larger urban metropolitan statistical areas that are saturated by larger brands to become the conversion brand of choice for owners of established hotels looking for alternatives in those markets.
History
Red Lion Hotels Corporation was founded in 1937. The company was incorporated in the state of Washington in 1978.