Almost overnight, U.S. travel buyers have a new hotel mega-chain on their supplier tender list. This year has been a case of REIT place, REIT time for Sonesta. Backed by its 34 percent owner and capital partner, the real estate investment trust Service Properties Trust (also known by its Nasdaq symbol SVC), Sonesta has mushroomed from a 58-property group at the beginning of 2020 to around 1,200 today. All but a couple of dozen are located in the U.S., with most of the rest in South America.
The meteoric rise of Newton, Mass.-based Sonesta began in August 2020 when InterContinental Hotels Group defaulted on payments for 103 hotels owned by SVC. The trust transferred the properties to Sonesta. Six months later SVC transferred just under 100 Marriott hotels to Sonesta following a similar default in October 2020.
Then Sonesta went stratospheric. In March 2021 it completed the acquisition announced three months earlier of RLH Corp., owner of the Red Lion Hotels brand, consisting of 900 franchised hotels.
Sonesta said it now is the eighth-largest hotel company in the United States. Its 15 brands range from economy to upper upscale, with a strong presence in the extended-stay marketplace as well. Two brands that launched in 2021, Sonesta Simply Suites and Sonesta Select, are aimed in particular at the business traveler.
Presiding over this exponential growth has been Carlos Flores. An executive with a background in hospitality, IT, media and retail, Flores joined Sonesta as an executive vice president in 2012 when it had only three hotels. Three years later, he became president and CEO.
“While it may seem rapid, this major growth is something we have been planning for over the years,” Flores recently told Forbes magazine. “When the pandemic presented some unique growth opportunities, we were not going to hide under a rock. As a small but competent group with lofty ambitions, we are now seeing those plans come to fruition.”
Expect Sonesta to keep growing. In September the company announced the official launch of Sonesta Franchising, aimed at persuading many more hotel owners to switch to the Sonesta flag.