How an $8 Million IHG Default Managed to Double the Size of a Boston Hotel Company Overnight
Photo Credit: IHG's loss is Sonesta International Hotels Corporation's historic gain, as the Boston company picks up 103 hotels due to an IHG default. Sonesta International Hotels Corp.
Skift Take
IHG’s loss stands to be the first in several gains for Sonesta if the hotel company continues to partner with its lodging trust investor on pandemic-related investment and rebranding opportunities around the world.
Suburban Boston-based Sonesta International Hotels is slated to more than double the size of its 80-hotel portfolio this fall thanks to an IHG default on guaranteed property returns with Service Properties Trust, a lodging real estate trust that also owns a 34 percent stake in Sonesta.
But Sonesta’s chief executive isn’t settling on one growth opportunity. He expects many more ways to beef up the Sonesta portfolio are coming down the line due to the coronavirus pandemic.
IHG failed to meet a late August deadline on an $8.4 million payment on guaranteed property returns Service Properties Trust, or SVC, said the hotel company had owed since July on 103 properties.
SVC plans to transfer the portfolio — split between 22 full-service hotels under brands like InterContinental and Kimpton as well as 81 extended stay hotels under flags like Candlewood Suites and Staybridge Suites — to Sonesta "on or around November 3
