Carlson sells hotel empire to Chinese conglomerate

The Hotel Ukraine in Moscow
The Radisson hotel chain is part of Carlson Companies' deal to sell its hotel operations to Beijing-based HNA Tourism Group Co. Pictured is Hotel Ukraine in Moscow.
Alexander Nemenov | AFP/Getty Images

Updated: 7:28 p.m.| Posted: 5:03 p.m.

Minnetonka-based Carlson Companies said Wednesday it is selling its iconic worldwide hotel operations to HNA Tourism Group Co. of Beijing — a stunning turn for one of the Twin Cities' legendary corporate giants.

Carlson, one of the world's largest privately held corporations, operates 1,400 hotels across the globe. It also controls Carlson Wagonlit Travel, a travel management business that operates in more than 150 countries.

"Carlson Hotels own a powerful set of global brands and this historic agreement provides tremendous opportunities for growth," David P. Berg, Carlson Hospitality Group chief executive officer, said in a statement announcing the deal.

Terms of the deal were not disclosed. But it includes the well-known Carlson hotel brands, including the Radisson chains.

David Loeb, a senior hotels analyst at Baird, said the industry is seeing more consolidation in order to compete with major industry players like Marriott and Hilton.

"Solid brands like Country Inn and Suites have a hard time attracting new owners or owners for new developments when those owners can look to Hilton or Marriott feel like instead, if they put a Hampton Inn flag or Courtyard flag, they'll have tremendous inbound customer volume because they're part of a Marriot system," he said.

Loeb says online travel agencies like Travelocity and Priceline have a great deal of market presence. By consolidating, hotel groups can get more have more pricing power on those sites and can draw customers through larger reward programs.

The companies said Carlson Hotels would stay headquartered in Minnetonka.

Loeb said the Minnesota headquarters could actually grow with the sale.

"If HNA follows through with their plans to become a larger and larger player then there could be more opportunities to make these groups of brands really more solid and bigger," he said. "And that could make the U.S. headquarters of HNA even more important."

HNA Tourism Group is a unit of HNA Group Co., Ltd., a corporation with operations in aviation, tourism, hospitality, finance, online services and other sectors, according to the joint statement.

As part of HNA Tourism Group, "Carlson Hotels will have an opportunity to advance our commitment to providing guests with hospitality world-wide," added Berg.

"Hospitality is in our hearts, which made this a difficult decision," said Diana Nelson, Carlson Board chair and granddaughter of Curt Carlson, who founded the family company in 1938.

"We strongly believe that selling our hotel business to HNA Tourism Group, a company that fully recognizes its value and heritage, is the best way for us to position it for success and to be true to my grandfather's legacy in the long term," she added.

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