Will Choice Hotels Buy Doubletree?

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Choice Hotels CEO Steve Joyce makes no secret that he'd like to add an upscale flag to the company's current lineup of mostly midscale and lower brands. During a conference call last week with stock analysts, Joyce repeated his desire to buy a brand or two in the upscale and upscale extended-stay segments.

He specifically mentioned Doubletree and Sheraton as the types of brands that would fit well into Choice's portfolio. He quickly added that his interest is “not in those brands in particular but that sort of price point where you're running 3.5- to 4-star full-service hotels.”

I think Doubletree, in particular, is an enticing acquisition possibility for Choice. Doubletree is somewhat an orphan in the Hilton family: It's very similar to but not the same as the full-service Hilton brand; nor does it have the strict business traveler focus of Hilton Garden Inn. Also, given Hilton's recent legal entanglements, and the imminent move of its headquarters to Virginia, I wonder how many eyes may be off the ball when it comes to day-to-day business. Doubletree could easily get lost in the shuffle. Also, Hilton's parent, Blackstone, has had its share of financial woes and perhaps could use the cash a Doubletree sale would yield. Joyce told the analysts he's got the money to buy—now.

The addition of Doubletree, or even Sheraton, would give Choice additional clout and credibility among the traveling population, as well as more locations in coveted center-city and resort markets. And from development, marketing and even operations standpoints, a full-service brand like Doubletree would be an excellent complement to Choice's burgeoning but still very small Cambria Suites brand.

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