“Red Lion comes roaring back to claim Bay Area lodging market”

Red Lion comes roaring back to claim Bay Area lodging market

Posted: 09 Dec 2010 06:07 AM PST

Red Lion Hotels Corp. has muscled into the Bay Area with new franchises at inns in Oakland and Concord, and the company said Wednesday that it hungers to expand even further in the Bay Area.

Spokane, Wash.-based Red Lion Hotels has struck deals to re-brand the Park Plaza Hotel near Oakland International Airport and to re-brand the Holiday Inn Concord on Burnett Avenue. The company also signed a franchise license agreement to re-brand the Vagabond Inn Executive in Rancho Cordova, near Sacramento.

"We want to have more brands in the Bay Area," said George Schweitzer, chief operating officer with Red Lion Hotels. "Red Lion is known in this area. That brand is coming back."

Early next year, the 189-room Oakland hotel will be renamed Red Lion Hotel Oakland International Airport. Starting in January, the 189-room Concord lodging complex will convert to Red Lion Hotel Concord.

"We are glad to be back in the Bay Area," said Rich Carlson, a vice president for lodging development with Red Lion Hotels. "We would like to add a number of hotels to our brand."

The company has begun to scout for hotels in the South Bay, the Peninsula and San Francisco. Red Lion also might consider "one or two" more hotels in the East Bay, Carlson said.

"There is a great opportunity in the Bay Area," Schweitzer said. "Several other hotel owners have expressed interest in our brand. We are exploring these possibilities."

The sour economy is a big

factor behind Red Lion's push to secure re-branding deals. Tough times have caused room revenue to evaporate at numerous hotels in California.

"Revenues are down for hotels in California," said Alan Reay, president of Irvine-based Atlas Hospitality Group, which tracks the hotel market in the state. "Some of them are looking for new brands."

The types of hotels that are looking for new brands are big-name lodging places that are about 20 to 30 years old, if not more.

Hotel operators pay money to hotel chains for the franchise right to have a brand name on the building. Typically, the more prestigious the name, the higher the price to have that particular brand name.

"Owners who have Holiday Inn, Hilton, Marriott, a lot of them simply cannot afford to keep the brand on there based on the revenue the hotel generates," Reay said.

One case in point is a hotel in Ontario in Southern California that was sold rather than upgraded. The hotel would have cost $14 million to $15 million to upgrade to Marriott standards. Instead, the hotel was sold to a lesser-known operator for $12 million.

"Red Lion stands to pick up a lot of older properties where it no longer makes economic sense to keep it a Holiday Inn, Hilton or Marriott," Reay said.

The new operators intend to undertake improvements in both rooms and public areas of the hotels.

"We do a detailed property improvement plan with all of the hotels we take on," Carlson said. "Some are immediate at the time of opening, such as signs. Other improvements are phased in."

The upgrades often include replacement of carpets, bedding and drapes. In addition, the lobbies and other public areas also are often renovated.

"The arrival experience at a hotel is very important," Carlson said. "When guests arrive at a hotel, we want them to know it is a Red Lion and that it is the kind of hotel they expect."

The hotel industry money squeeze could well open a number of doors for Red Lion.

"For a brand like Red Lion, this is a great opportunity," Reay said.

Contact George Avalos at 925-977-8477.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured site: So, Why is Wikileaks a Good Thing Again?.