SILVER SPRING, MD. --
Choice Hotels International acquired Suburban Franchise Holding Co.
and its subsidiary, Suburban Franchise Systems, for $10 million.
Suburban Franchise Holding is parent to Suburban Extended Stay
Hotels, a chain of 67 properties, which becomes the 10th brand in
the Choice Hotels system.
With the acquisition,
Choice also becomes the largest franchisor in the economy
extended-stay lodging segment.
As part of the
agreement, Kevin Lewis, president and CEO of Suburban Franchise
Systems, will join Choice as vice president, extended stay, with
responsibility for Choices MainStay Suites, as well as the Suburban
brands.
This acquisition
allows Choice to enter a new segment, building on the excellent
reputation and performance of the Suburban brand and the expertise
we have gained through our midscale extended stay MainStay Suites
brand, said Charles Ledsinger, president and CEO of Choice Hotels,
in a statement. The economy extended-stay segment has strong
supply-side potential and a solid track record for providing
above-average returns for hoteliers. Last year the segment achieved
an average occupancy percentage in the mid 70s compared with 61%
for the overall US hotel average.
The acquisition comes
four months after Choice rolled a prototype for an economy
extended-stay hotel brand it is developing.
At the time Choice
executives said they were interested in the extended-stay hotel
segment because no hotel chain dominated the market.
To contact the
reporter who wrote this article, send e-mail to Michael Milligan at
[email protected].