Red Lion Hotels Corp.s expansion strategy announced last week calls for it to enter some of the biggest markets in the West, along with Chicago and Dallas, as it seeks to strengthen the brand of its hotel chain.


The Spokane company, which until now mostly has concentrated on establishing a presence in mid-size cities as it has built a chain of 66 hotels in the West, said it intends to have hotels in San Francisco, Phoenix, Los Angeles, Minneapolis, Dallas, and Chicago, along with Albuquerque, Tucson, and Colorado Springs, within five years. The company also said it was changing its name from West Coast Hospitality Corp. to Red Lion Hotels Corp.


Cities such as San Francisco, Phoenix, and Los Angeles are hub markets for travelers who are bound for or coming from other communities in their regions, says Anupam Narayan, Red Lions executive vice president, chief financial officer, and chief investment officer.


Theres a lot of traffic that goes back and forth within a state, and theres a regional pattern, he says. We studied where our customers are going, and where theyre coming from.


For example, while Red Lion has hotels in Modesto, Bakersfield, Redding, Eureka, and Sacramento in northern California, it doesnt have a hotel in San Francisco, which can serve as the hub in a wheel for such communities in that end of the state, Narayan says.


Art Coffey, Red Lions CEO and president, says that moving into the half-dozen bigger cities Red Lion has targeted in its expansion plan will raise our profile and replicate the kind of network the chain has in the Northwest, where Seattle and Portland serve as key cities, and in the Intermountain West, where Salt Lake City serves as a hub.


The company plans to grow by franchising, owning properties itself, and forging joint ventures. Coffey says, We would like a joint-venture ownership in the tier one markets, which would allow the chain to control its presence in such big markets better than if it had a franchise agreement with a hotel owner there.


The company says that franchising, in which another hotel owner agrees to operate under the Red Lion name and to meet the Spokane-based hotel chains standards, allows it to expand without expending a lot of capital. Franchise outlets gain access to the chains reservation system, benefit from its marketing and joint-purchasing programs, and can receive management advice.


Narayan says that in Red Lions expansion drive, The one thing we probably wont do is build. Theres not a lot of markets where its cheaper to build than to expand through other methods, he says.


Red Lion said last week it hopes to be in 100 markets in five years, up from 50 now. Narayan says the company chose its expansion targets because its known in those cities; they serve as feeders to its other markets; in many cases they fit in well with a strategy of expanding along Interstate 5; or theyre hub cities.


Chicago is the easternmost target for expansion, and Dallas would be the companys second beachhead in Texas. In its new expansion brochure, the company says it intends to progressively move east leveraging the momentum of our Western growth and as its Eastern migration begins, enter new markets with a strong urban anchor property.


Coffey says that a gathering this week in Phoenix called The Lodging Conference will be an opportunity to talk to major noted investors and discuss the companys results.