Red Lion Enters Cathedral City - Analyst Blog


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Spokane, Washington-based Red Lion Hotels Corporation ( RLH ) recently opened a new franchise in Cathedral City, California to lure its guests during winter. As part of a brand revitalization program, the Red Lion brand has been separated into Red Lion Hotels and Red Lion Inns & Suites. The new signage and logo are also intended to clearly demarcate the services and offerings of each of its brands and thus be more informative for guests.

The addition of the 97-room Cathedral City property falls under the 'Inns & Suites' category. It is quite significant to the hotelier as it will become the first Inn & Suites property with a new emblem.

This property is located adjacent to southeast of Palm Springs and is owned and managed by Washington-based Sang and Connie Chae of WR Management Co.  The new property is strategically located in a dynamic market like California and hence is expected garner travelers on a regular basis. According to California Travel Association, with thriving international arrivals, the region is arguably one of the most visited places by overseas visitors.

Additionally, the hotel offers an outdoor pool and sundeck. Along with several other amenities, the property is notably surrounded by more than 100 golf courses in the region.

Red Lion, which owns, operates and franchises mid-scale full, select and limited service hotels, has been considering expansion options for quite some time. Earlier, toward the end of November, this leisure company inked a franchise license agreement with the owners of a hotel located in Kent, Washington.

Once refurbished, this 60-guestroom Kent property will be unveiled as Red Lion Inn & Suites. Prior to this, back in September, Red Lion inked a franchise license agreement with the owners of a hotel located at the Denver International Airport.

Red Lion, which carries a Zacks #3 Rank (short term Hold rating), has expanded in many cities just like its peers Starwood Hotels & Resorts Worldwide Inc. ( HOT ) and Hyatt Hotel Corp. ( H ). We believe that Red Lion will benefit from the excellent positioning of the property, with its location complementing the brand better.

HYATT HOTELS CP (H): Free Stock Analysis Report

STARWOOD HOTELS (HOT): Free Stock Analysis Report

RED LION HOTELS (RLH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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