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Behind the Change in Sonesta Hotels’ Growth Strategy

NEW YORK — After an era of explosive growth, fueled by brand conversions and acquisitions, executives at Sonesta Hotels International believe their company is settling into a new era of thoughtful and organic growth.

Sonesta is actually moving in the opposite direction from most hotel brand companies — paring down from 17 brands to 13 that are “all rationalized into their swim lanes,” Executive Vice President and President of Franchise and Development Keith Pierce said on the Hotel News Now podcast. He added the Newton, Massachusetts-based company is now working on building out an organic pipeline of growth for the first time in this iteration of Sonesta.

Sonesta first saw a wave of growth in 2020 when partial owner Service Properties Trust began converting Marriott International, IHG Hotels & Resorts and Wyndham Hotels & Resorts branded hotels to Sonesta brands. The company’s portfolio received another boost in 2021 with the acquisition of RLH Corporation and its franchising operations.

“This year will be the first year in our number of franchise openings is now surpassing the number of exits in a large franchise system,” Pierce said. “To Brian [Quinn] and the team’s credit, we’ll probably open 80 hotels this year organically, and that started with really no pipeline.”

Quinn, Sonesta’s chief development officer, said on the Hotel News Now podcast that the company’s unique structure of primarily being owned by its biggest hotel owners has the advantage of keeping the brands owner-focused and through continued investments into the system.

“They’re committed to have marquee assets in each of the top 25 MSAs,” he said, citing the $165 million acquisition then subsequent repositioning and renovation of The Nautilus in Miami. “We’re pretty much there with the exception of [Los Angeles].”

For more from HNN’s conversation with Sonesta’s Keith Pierce and Brian Quinn, listen to the podcast above. Subscribe to the Hotel News Now podcast on Apple, Spotify or wherever you find podcasts.

Listen to the full Hotel News Now podcast episode “Sonesta Execs Embark on New Era of Growth” on CoStar.