Choice Hotels Buying Radisson, Here’s What It Means For Members

Choice Hotels is buying Radisson and I did not expect this.

  • Radisson Hotels was split into an Americas and an international company
  • It’s owned by Jin Jiang, effectively Chinese government-backed, and the U.S. imposed restrictions on data sharing. Hence there’s an Americas loyalty program and an international one, and customers can belong to both and transfer points between the two.
  • Radisson was shopping the hotel portfolio. It’s more upscale overall than Choice is, but a tired brand in the U.S.

The price is $675 million for the “franchise business, operations and IP” of the U.S., Canada, Latin America and Caribbean business. This also includes real estate for 3 hotels.

  • 10 Radisson Blu hotels
  • 130 Radisson hotels
  • 9 Radisson Individuals
  • 1 Park Plaza hotel
  • 4 Radisson RED hotels
  • 453 Country Inn & Suites by Radisson
  • 17 Park Inn by Radisson hotels
  • Plus the Radisson Inn & Suites and Radisson Collection brands

Radisson Red Minneapolis

With 624 hotels in total, this is just over $1 million per property (abstracting away from real estate). That actually seems low for the business, even though it includes few hard assets.

This seems like a real miss for Hyatt. Though the hotels are more downmarket than Hyatts overall, it would have given them some reach outside of the larger metro areas in the U.S. where they’re strong.

It’s unclear at this point what happens to Radisson Rewards Americas members, though for now it’s possible to transfer those points to the international program. One imagines that the program will be folded into Choice Privileges, though I’d also be surprised if points transfers are 1:1. Perhaps 1:2 is more like it.

Consider that the cheapest Radisson redemptions are 15,000 points while the cheapest Choice redemptions are just 8,000 points. And the priciest Radisson redemptions are 75,000 points while the highest-end properties within Choice’s own portfolio cost 35,000 points. So here’s a logic to 2:1 into Choice Privileges, but a more generous 1.5:1 more generate goodwill.

This deal is great for Citibank ThankYou Rewards customers, given their conversion rate of 1:2 and having more hotel redemption options once the Radisson portfolio is incorporated.

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