Red Lion Hotels Corporation
) recently announced the signing of a franchise license agreement
with WR Management Co. for a hotel -- Quality Inn & Suites Date
Palm -- in Cathedral City, California. The agreement is in line
with Red Lion Hotels' strategy to expand its footprint in core
markets through signing new franchise agreements.
Cathedral City, the second largest city in Coachella Valley in
California, is famous for local golf resorts and places of tourist
attractions. Cathedral City is rapidly emerging as a commercial
hub, with tourism playing a key role in the development of the
Several major hoteliers like
Hyatt Hotels Corp.
Starwood Hotels and Resorts Worldwide Inc.
) already have a strong presence in the city. The consequent demand
for world-class accommodation in this area has caught the attention
of Red Lion Hotels.
CHOICE HTL INTL (CHH): Free Stock Analysis
HYATT HOTELS CP (H): Free Stock Analysis Report
STARWOOD HOTELS (HOT): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
RED LION HOTELS (RLH): Free Stock Analysis
WYNDHAM WORLDWD (WYN): Free Stock Analysis
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Quality Inn & Suites Date Palm is a hotel under the Quality Inn
Choice Hotels International Inc.
). Located in the Palm Springs region of Southern California, the
97-room select-service hotel boasts a class of basic and modern
amenities that caters to travelers seeking quality service. As per
the agreement, Quality Inn & Suites Date Palm hotel will be
converted to Red Lion Hotel Cathedral City in late 2012.
The core Californian market has recovered rapidly after being badly
affected during the housing downturn. Presently, the hotel
industry, especially in Southern California, is flourishing. Red
Lion Hotels already has 6 hotels in vibrant submarkets of
California -- Red Lion Hotel Anaheim, Red Lion Hotel Eureka, Red
Lion Inn Rancho Cordova, Red Lion Hotel Oakland International
Airport, Red Lion Hotel Redding and Red Lion Hotel Sacramento at
However, the company should be wary of its competitors. Renowned
hotel companies like
Marriott International Inc.
Wyndham Worldwide Corp.
) are also poised to expand their presence in California.
Red Lion Hotels owns, operates and franchises midscale, full,
select and limited service hotels under the Red Lion brand. As of
now, the company's portfolio consists of over 45 hotels, spanning
more than 9,000 rooms and situated in 9 states and 1 Canadian
province across U.S. In addition, Red Lion Hotels owns and operates
an entertainment and event ticket distribution business.
The company is scheduled to release its second quarter 2012
earnings on August 3, 2012. The Zacks Consensus Estimate for the
second quarter is pegged at a loss of 4 cents per share. We
presently have a long-term Neutral recommendation on the stock.
However, the company carries a Zacks #2 Rank (short-term Buy