Key Points
- Choice Hotels paid $24.3 million in September to terminate an agreement to acquire Spain’s Sercotel, a person familiar with the transaction told Skift; Choice disclosed the payout without naming the company.
- CEO Dominic Dragisich said the deal started as an option to buy full ownership and “eventually migrated to an obligation,” and that the target’s growth shifted toward leased hotels rather than franchise and management fees.
- The termination sits alongside Choice’s capital-recycling push, including the recent sale of two owned hotels for about $34 million in estimated net cash proceeds while retaining the franchise contracts.
Summary
Choice Hotels paid Barcelona-based Sercotel $24.3 million in September to exit an acquisition agreement, a person familiar with the transaction told Skift. Choice disclosed the payout in its latest quarterly filing without naming the company, noting it terminated the buy-out agreement on September 16. On the earnings call, CEO Dominic Dragisich said what began as an option to buy full ownership “eventually migrated to an obligation,” and that Choice had expected the business to grow through franchise and management fees. Instead, growth increasingly came from leasing hotels. Dragisich described the leases as healthy but said the added lease exposure conflicted with Choice’s asset-light strategy. The two companies have partnered on distribution since 2018, and Sercotel generated €170 million in revenue in 2025. The exit fee lands alongside Choice’s push to recycle capital tied up in real estate: the company recently sold two hotels for about $34 million in estimated net cash proceeds while keeping their franchise contracts.
