Travel Rewards Credit Cards

Jan 27

Carlson Hotels is up for Sale

Merger-mania is coming back to the hotel space, as Carlson Hotel Group, known for its Radisson brands, has put itself up for sale.

Carlson, the former owner of TGI Fridays,* ran the eponymous “Club Carlson” rewards program. The program itself was a pretty good one and was known for running frequent promotions. It’s going to be sad for a lot of people if the program disappears, as it was easy to accumulate and use points.

Every hotel in Bali looks like this

Every hotel in Bali looks like this

Unfortunately, Carlson simply found it hard to keep up with the larger brands. Most hotel chains don’t actually own the individual hotels that carry their names. Rather, they license the name to a franchisee and/or have a contract to manage the hotel. Thus, economies of scale are crucial: You have a certain amount of fixed costs, and everything over that is profit. Carlson also tended to target leisure and airport traffic, which is more price-sensitive than the business traveler.

There is no buyer, although the obvious choice would be Hyatt, which has a nice brand for business travelers but lacks a leisure alternative. The problem that they would have is that Carlson’s brands don’t have the best reputation. There would be significant investment necessary to bring them up to snuff.

 

*Fun Fact: Alan Stillman, the founder of TGI Friday’s, later founded a second restaurant concept, McCormick and Schmick’s. It’s hard to find a restaurateur who has successfully created two disparate concepts.

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