Red Lion Growth Strategy Includes Dispositions

SPOKANE, WA-Red Lion Hotels Corporation's board of directors has approved a new growth strategy that will result in the company shedding six of its company-owned hotels and placing greater emphasis on franchising in major Western U.S. markets. CBRE will handle those sales.

"Throughout the economic downturn that impacted the entire hospitality industry, the Board of Directors and management team of Red Lion Hotels have executed a focused approach to improve our operations, increase our financial flexibility and position the company to benefit when markets recovered," said interim president and CEO James Evans in an corporate report. "Now that the industry has stabilized, the board is confident our new strategy is the best way to continue optimizing shareholder returns and the ongoing CEO search process will identify the best leader to carry this plan forward.”

The company has recently launched individual sites for its hotels, which visually define its expertise as 'localists.' In addition, specialized training and support for Red Lion's frontline associates is ongoing at owned, leased and franchised properties, including personalized name tags designed to prompt guests to ask about local experiences. Hotel vans are tailored specifically to each market and wrapped with colorful photos of local attractions.
"With more than 450,000 square feet of meeting space across our portfolio, group business revenue plays an important role in our operating results," Evans said. "The rebound in the group meetings market has lagged the overall improvement in the hotel industry, but we believe there are opportunities to increase business in this important segment by executing programs to attract meeting planners to our properties. The sale of these six non-strategic properties will provide additional capital to support these initiatives."

The properties to be sold, which will be brokered by CBRE Hotels representative Chris Burdett, include two hotels in Idaho and four in Washington:

    --    Red Lion Hotel Canyon Springs,
        112 rooms; Twin Falls, ID

    --    Red Lion Hotel Columbia Center,
        162 rooms; Kennewick, WA

    --    Red Lion Hotel & Conference Center Kelso/Longview,

         161 rooms; Kelso, WA

    --    Red Lion Hotel Pocatello,

         150 rooms; Pocatello, ID

    --    Red Lion Hotel Wenatchee, 149 rooms

          Wenatchee, WA

    --    Red Lion Hotel Yakima Center, 156 rooms
           Yakima, WA

In 2013 to date, Red Lion has added 11 franchises and currently has a total of 30 franchised properties. The company has set a goal to add at least 20 new locations to its franchise network in 2014, dependent upon market and economic conditions. Red Lion will continue to concentrate its growth efforts in the western half of North America, Evans said.
"We have an active pipeline and positive interest from a diversified group of hotel owners and investors. Red Lion will focus more attention on building its presence in city centers of large metro-areas, possibly through selective joint ventures or special incentives with institutional investors when appropriate," Evans noted. "As we add larger, urban properties to our franchise portfolio, we expect to improve RevPAR and ADR across our network, which we believe will make a Red Lion franchise more attractive to investors and owners.