Choice Hotels International will acquire extended-stay brand
Woodspring Suites for $231 million. The transaction fills a relative gap in
Choice's portfolio in the extended-stay space, adding 240 properties across 35
states. The new WoodSpring properties plus Choice's existing MainStay Suites and
Suburban Extended Stay Hotel brands, will bring its extended stay portfolio to
350 properties.
WoodSpring Suites launched in 2015 as a rebranding
of Value Place, a move aimed at attracting more franchise deals and a new
clientele. Earlier this year, the company
reported it was on track to open 21 hotels in 2017 and an additional 45
hotels in 2018.
"Extended stay is a fast-growing segment, reporting
some of the strongest gains in demand, and has led the hospitality industry in
annual [revenue per available room] growth," said Choice president and CEO
Patrick Pacious. "The addition of the WoodSpring Suites brand will allow
us to strengthen our scale within the attractive extended-stay segment, expand
our runway for growth and continue to create value for our customers,
franchisees and shareholders."
Choice will acquire WoodSpring's franchise
operations, marketing and development and the company intends to hire
WoodSpring's franchise business employees. The transaction is expected to close
during the first quarter of 2018, subject to regulatory approval.