How The Pandemic Created A New Hotel Giant In Less Than A Year

Occupancy levels hit a record-breaking low of 44% for the year, down from 66% in 2019, according to analytics and data firm STR. The average daily hotel rate fell by 21%, and the all-important revPAR (revenue per available room) fell by 48%. For the first time in history, the industry surpassed one billion unsold rooms, easily blowing past the previous record of 786 million in 2009.

"During the Covid pandemic, all hotels brands have been hammered, some more than others," says Chekitan Dev, a professor at Cornell University's School of Hotel Administration. "But as has been often said, there's always opportunity buried in a crisis."

No hotel company has mined pandemic-year opportunity like Sonesta International Hotels. While the rest of the industry was dialing back, this little-known hotel group went on a massive acquisition spree, and ended 2020 with a larger portfolio than Hyatt's.

"I'd love to claim foresight and how this was all part of a big master plan," said Carlos Flores, CEO of Sonesta. "But that just would be insincere. Probably what is more the point is is that we've always had lofty ambitions."

Until now, Sonesta has been a sleeper player on the hospitality ballfield. It's move to the big leagues began in 2012, when a small family-owned hotel business with three properties was acquired for nearly $175 million by The RMR Group, an asset management company that, through its subsidiaries, provides business and property management services in the United States.

Soon afterward, Flores came on board as CEO and in a few short years Sonesta grew twentyfold, from just three domestic properties to sixty.