Published in CEO Magazine, August 5, 2024.

“… supply chain management leader Avendra has helped the company reduce operational costs at dozens of its properties.”

Sonesta International Hotels CEO John Murray took opportunities few others would have seen to build his portfolio of hotels up to be the eighth biggest in the world.

When the going gets tough in the hotel business, the tough seize opportunities that few others realize were there to be seized.

That’s certainly true of Sonesta International Hotels CEO John Murray, who stepped in to acquire the hotel chain in the global financial crisis 15 years ago and more recently, to take over its leadership during the COVID-19 pandemic.

In doing so, he put Sonesta on a pathway to extraordinary growth that has seen it establish 1,200 hotels worldwide and become the eighth largest hotel company in the world, with more than 100,000 guest rooms across 15 prestigious brands in eight countries.

Its portfolio includes The Royal Sonesta; The James Hotels; Sonesta Hotels, Resorts & Cruises; Sonesta Select; Sonesta Essential; Sonesta Simply Suites; Sonesta ES Suites; Red Lion Hotels, Inns & Suites by Sonesta; Signature Inn by Sonesta; Americas Best Value Inn by Sonesta; and Canadas Best Value Inn by Sonesta.

Murray’s involvement came about through Service Properties Trust, a real estate investment trust that he helped take public in 1994 and where he subsequently served as President for 22 years. It currently manages assets worth more than US$42 billion and bought Sonesta in early 2012 when the effects of the economic downturn were still being felt.

Repositioning for Growth

It wasn’t his only strategic acquisition that year. Murray anticipated the possibility of future defaults and positioned the trust to manage properties directly if that became a necessity.

“During the great recession, another Boston-based firm named Sontesta was put in play by an activist shareholder. Even though it was a family-controlled company, they were advised by their bankers that they should sell,” he says.

Realizing it represented a golden opportunity for growth, Murray led the buyout and in doing so, expanded from managing two hotels to about 60 by the end of 2019. It marked a new beginning for Sonesta in managing hotels, as it moved across world-class brands including IHG and Wyndham.

“We opted to be proactive and control our own destiny.”

Then, during the pandemic, perhaps the biggest hospitality crisis in history, the Service Properties Trust transferred 200 Marriott and IHG hotels to Sonesta.

“When all these lockdowns were happening, these major chains were all saying, ‘Look, the hotels are emptying out so we can’t pay you a return on your investment,’ so we said, ‘Well, guess what? We have shareholders who we need to look out for also, and they’re not going to wait around until 2024,’” he recalls.

While many hotel chains were facing ruin, Murray grabbed the chance to pivot.

“We opted to be proactive and control our own destiny. Someone I knew at Wyndham called me and said, ‘Hey John, I’m trying to buy Red Lion Hotels, but my capital partner has pulled out because of the pandemic.’ So we bought Red Lion Hotels into Sonesta,” he says.

Integration and Streamlining

Murray paid US$90 million for Red Lion’s 900 properties, integrating them under the Sonesta umbrella – no mean feat given the commotion caused by stay-at-home orders and economic uncertainty.

“It was a challenging time for the investment trust to raise capital so I thought franchising would be a great way to go, and so that’s what we did with the acquisition of Red Lion,” he reveals.

Operations were streamlined and a cohesive brand image established.

“Sonesta and Avendra’s partnership is built on our shared mission of delivering quality, value and exceptional service. Avendra utilizes its diverse network of industry-leading suppliers and service providers in conjunction with our in-house supply chain experts to drive efficiencies across Sonesta’s operations. Collaborating with a customer-centric brand like Sonesta inspires us to provide superior service, supporting Sonesta’s desire to exceed its hotel guests’ expectations.” – Walt Sheffler, President, Avendra