Red Lion Hotels Corporation
) recently inked a franchise license agreement with the owners of
a hotel located in Kent, Washington. The 60-guestroom property
will now become Red Lion Inn & Suites Kent. This new property
will be unveiled once the hotel is refurbished. Financial terms
of the deal were not disclosed.
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The new property is strategically located just 20 miles south of
Seattle and in close proximity to several important venues such
as ShoWare Center arena, Emerald Downs, Kent Events Center and
the Great Wall Shopping Mall. Additionally, the hotel also offers
various facilities such as an indoor pool, an exercise room and
meeting space to its visitors.
We view the deal as strategically positive for both the parties.
The deal paves the way for the owners of the hotel, Kent South
Hospitality, to reap the benefits from Red Lion's much greater
scale and brand name. This will aid the property compete in the
On the other hand, Red Lion will enjoy the excellent positioning
of the property. The company had been in search of an asset in
any of the strong markets in the I-5 passage through Washington
and Oregon. Management at Red Lion believes that the location of
the property will complement and highlight its brand better, once
the renovation is complete.
Kent is a popular destination for both domestic and overseas
visitors, which makes tourism an important aspect of its economy.
Thus, this partnership is expected to increase Red Lion's reach
into the tourism friendly city of Kent. With the presence of an
extensive coastline, Kent not only offers traditional seaside
holiday resorts but many natural and historic attractions as
However, Red Lion's new property will likely face stiff
competition due to the presence of its peers like
Starwood Hotels & Resorts Worldwide Inc.
Hyatt Hotel Corp.
) in Kent. Red Lion currently carries a Zacks #3 Rank, which
translates into a short-term 'Hold' rating.