Sonesta International Hotels Corporation has hit the ground running with its franchising model. Not long after Keith Pierce joined as EVP/president, franchise & development, last March and Sonesta Franchising was introduced in September, the company has added 50 new franchised hotels since the beginning of this year.
Twenty different ownership groups—ranging from hospitality equity funds to individual owner/operations—have franchised hotels with Sonesta for the first time. On top of that, these groups have collectively committed to franchise 20 more Sonesta properties within the next 24-36 months.
“Our principal commitment is establishing strong relationships and increasing engagement among franchise groups,” said Brian Quinn, chief development officer. “Our efforts are comprehensive and focused on nurturing relationships with teams at the new franchise properties and those that join us in the future.”
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Owners looking to franchise Sonesta hotels can choose from not only the established Sonesta Hotels & Resorts and Sonesta ES Suites brands, but also the recently introduced Sonesta Select and Sonesta Simply Suites brands, in addition to the eight legacy brands within the Red Lion family—Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, Signature Inn, GuestHouse Extended Stay, Americas Best Value Inn, Canadas Best Value Inn and Knights Inn.
Ishan Patel, owner/operator, Sonesta ES Suites Houston Galleria, was the first Sonesta franchisee.
“It’s an honor to be the first franchisee,” said Patel. “I love Sonesta. I was really fortunate and lucky to acquire this Houston Galleria location from Sonesta and its capital partner, SVC. They really kept this property top-notch. So, overall, it was a great experience working with Sonesta.”
Pierce’s arrival came shortly after more than 200 additional hotels from Service Properties Trust (SVC) joined the Sonesta family. SVC, which owns 34% of Sonesta, offered 65 hotels from the portfolio for sale just prior to the end of the year. With the relationship-building done by the lodging development team, over 50 of those will remain with Sonesta as part of the franchise portfolio. These 20 owners who purchased the SVC properties encumbered with the Sonesta brand also committed to future deals with Sonesta.
Woodmere, NY-based real estate investment firm Churchwick Partners purchased 16% of the portfolio made available for sale.
“It’s not every day that you get to make a $100-million bet on an up-and-coming franchise,” said Asaf Fligelman, partner, Churchwick Partners. “We are very excited with the individuals at the helm of Sonesta. We think they’re going to drive incredible value for both the brand and the franchisees, and we are a group that likes to put our money where our mouth is. We think we are going to do an incredible job delivering excellent value to our customers and to our bottom line.”
He added, “We think Sonesta right now is at a turning point in the trajectory of what the brand is going to be. Sonesta as a franchisor understands the customer demographics and the cohort that we are trying to attract, and we think we have incredible alignment on the value proposition.”
Equinox Hospitality, a San Francisco-based hotel acquisition, development and management company, is another franchisee.
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“We’re very old school in that we’re very relationship-driven, and when you are doing deals like this, a lot of it comes down to history, trust, and linear values—and I think we’ve lined up on that,” said Adam Suleman, principal, Equinox Hospitality. “We’re very excited to keep going and move forward and, hopefully, not only grow the Sonesta brand, but grow our own portfolio as well.”
On why his company decided to franchise with Sonesta, Suleman said, “We really look at it like buying Apple stock in the ‘80s. If you look at Sonesta as a company in the last year-and-a-half to two years, they’ve grown incredibly. We’ve seen a machine behind the company, and we just want to grow and be a part of it.”
Sonesta’s entire portfolio now stands at 1,200 properties across 16 brands in eight countries, a 1,400% growth rate since mid-2020.
“The launch of Sonesta Franchising has driven tremendous interest in our business, building on our recent managed and franchised portfolio growth and expanding our success story even further,” said Pierce.
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