Red Lion Hotels Corporation: Difference between revisions

Red Lion Hotels Corporation

File:RLHC Logo Sm.jpg
Company type	Public
Traded as	NYSE: RLH
Industry	Hotels
Founded	Spokane, WA, USA (1937)
Headquarters	Spokane, WA , USA
Area served	United States, Canada
Key people	Donald K. Barbieri (Chairman) Jon E. Eliassen (President & CEO)
Revenue	USD 187.57 Million (2008)
Net income	USD 1.7 Million (2008)
Total assets	USD 380.77 Million (2008)
Total equity	USD 181.37 Million (2008)
Number of employees	3,026 (2008)
Website	rdln.com

Red Lion Hotels Corporation, formerly the WestCoast Hospitality until 2006, is a US corporation operating in the western United States and Canada through three subsidiaries: Red Lion Hotels, WestCoast Hotel Partners and TicketsWest.

The company's roots were founded in Spokane, Washington in 1937 under the name Goodale & Barbieri Company, a property management services and commercial development company. In 1976 the company began operating the River Inn in Spokane, its first hotel.^[1]

In 1998 Goodale & Barbieri made an Initial Public Offering and, the following year, changed its name to WestCoast Hospitality. In 2005 the company again changed its name, this time to Red Lion Hotels Corporation and, in 2006, divested from its property development operations by spinning-off that segment into an independent Goodale & Barbieri Company.

Red Lion Hotel Corporation operates in three revenue-generating segments: the Hotel Segment, the Franchise Segment and the Entertainment Segment.

Red Lion competes in the moderate-priced, full-service segment of the lodging industry, along with Holiday Inn, Ramada, and Quality Inn.

Business partners Tod McClaskey and Ed Pietz purchased the 89-room Thunderbird Motor Inn in Portland, Oregon in 1959, the first property in what was initially called Thunderbird-Red Lion Inns. In 1984 McClaskey and Pietz sold the chain—which, at the time, had 57 properties—to Kohlberg, Kravis, Roberts & Co. for a reported $600 million. ^[2]

In 1996 the chain was acquired by Doubletree which rebranded most of the properties as Doubletree Hotels. At the time Doubletree merged with Promus Hotel Corporation in 1999, only 19 hotels retained the Red Lion name. ^[3]

Red Lion Hotels was sold to WestCoast Hospitality by Hilton—which had previously acquired Promus—in 2001. By the time of the sale, the chain had rebounded to 42 hotels, 22 of which were franchises.^[4]

Seeking to revitalize some of its aging properties, in 2004 the company announced plans to sell 11 company-owned hotels to fund a $40 million "rejuvenation project" for the rest of the chain. ^[5] The following year WestCoast Hospitality changed its name to Red Lion Hotels Corporation, part of its effort to emphasize a renewed focus on the Red Lion brand.

Red Lion hotels are currently located in California, Colorado, Idaho, Montana, Nevada, Oregon, Utah, Washington and British Columbia.^[6] This includes approximately 30 company-owned and 17 franchised properties. The majority of these are full-service properties, though there are a few limited-service locations. In 2006 Red Lion Hotels announced plans to double the number of properties under the Red Lion brand within five years^[7] through acquisitions in Texas, California and Nevada and a gradual eastward expansion. However, by 2009 the chain had only managed to increase its holdings by two hotels. Between 2007 and 2008 parent company Red Lion Hotels Corporation lost one-third of its market value and ^[8] subsequently instituted a wage freeze and five percent pay reduction for salaried employees. ^[9] In a 2008 interview, CEO Anupam Narayan stated he expected the chain to lose six properties by the end of that year; franchises that did not commit to a required remodel program.^[10]

In 2004 Red Lion launched a major advertising campaign under the tag line "Stay Comfortable." Featuring a cartoon lion caricature, the campaign included full-page ads in daily newspapers in nine U.S. cities, as well as regional editions of USA Today.^[11] Created by ISM Boston, the campaign was recognized with an Adrian Award by the Hospitality Sales and Marketing Association International (HSMAI).

In February 2008 Red Lion announced it had revamped and renamed "GuestAwards", its customer loyalty program. The newly debuted "Red Lion R&R Club" featured lower point redemption thresholds.^[12]

West Coast Hotel Partners owns and operates the Cape Fox Lodge in Ketchikan, Alaska, the sole property in the division.

The Franchise Segment licenses the Red Lion brand to third-party hotel owners. As of 2009 there were approximately 17 franchised Red Lion hotels. Hotel owners can franchise as either a full service Red Lion Hotel, which offer restaurant and banquet meeting space; a limited service Red Lion Inn & Suites; or under the Leo Hotel Collection, for unique, botiquee or historic hotels.^[13] The Las Vegas Hotel & Casino was the first hotel to join the Leo Collection in February of 2013.^[14]

The Entertainment Segment operates TicketsWest. Founded in 1987 as G&B Select-A-Seat, a computerized ticketing service, TicketsWest is a minor, regional competitor to Ticketmaster and provides ticket sales and distribution services to concert and sports venues in several western United States. In 2007 it accounted for approximately 8% of company revenues.^[15]

In mid-2008 Columbia Pacific Opportunity Fund, an investment manager for the Baty family, the Seattle founders of Emeritus Corporation, submitted an unsolicited acquisition offer of $9.50 per share to acquire Red Lion.^[16] At the time, Columbia Pacific held 12.7 percent of Red Lion.

By October Columbia Pacific had withdrawn its offer and, shortly thereafter, the Red Lion board of directors enacted a poison pill plan, drawing the ire of Columbia Pacific who stated its belief that Red Lion should be liquidated because company-owned assets were in "excess of Red Lion's market capitalization."^[17]

Later that year, after the share price increased significantly, Red Lion removed its poison pill.