Carlson is just one big family business doing what is best

It was certainly no surprise when Carlson announced Wednesday that it's getting out of its hotel business.

There is a Chinese buyer, which makes the deal feel a little exotic. But the story here is really just a simple one: It's a case of family shareholders figuring out that there are better uses for their money than keeping it in a hotel business that faces more than one worrisome trend.

Carlson, after all, is really just a very big family business. Other family business owners should be paying attention to what this one is doing.

This business has been around since the Great Depression, and one of the best ways to ensure any family business lasts is to make sure the family's capital gets used wisely.

It wasn't a case here of dumping a company that wasn't doing well, either, as the family shareholders made clear in a letter to employees. It's more like it's both a good time and a worrisome time to be in the hotel business.

Right now, hotel company valuations are about as high as they have ever been.

But at the same time, the competitive threats only seem to be getting more worrisome. And online travel agencies, the likes of Booking.com, have been consolidating into more formidable players and making it tougher for hotel operators to negotiate favorable revenue splits.

That makes the name of the buyer here, HNA Tourism Group, a bit of a surprise. It's at only 75th place in the most recent Hotels magazine ranking of biggest hotel companies, with 18,300 rooms and 80 properties. That's still a big company of course, but on that same list Carlson stands at 13th, with nearly 10 times as many rooms.

But HNA has big plans. As the Carlson family shareholders explained, HNA appeared to be just the kind of partner they were looking for. It was a company committed to investing in the business to grow it, while also leaving the headquarters here in the Twin Cities, with CEO David Berg still in charge.

They also decided to answer another question directly, and that's whether the family shareholders have just decided to sell off all their business interests. The answer to that was no.

They remain committed to being business owners and not just passive investors, citing as one example the decision in 2014 to buy the 45-percent stake in Carlson Wagonlit Travel then held by an affiliate of JPMorgan Chase & Co.

Both of these transactions, getting out of hotels and doubling down on the investment in travel, are consistent with the kind of things the company has been doing throughout much of its history.

Gold Bond allowed retailers to reward their best customers with a strip of Gold Bond stamps for a purchase, pasted into books that could be exchanged to buy other things. They were a precursor to today's loyalty card.

Cash flow from this business is what founder Curt Carlson used to get into the hotel business in the first place, with the 1962 purchase of the Radisson Hotel in Minneapolis. On the other hand, family members pointed out in their letter, back when today's third generation of family shareholders were just teenagers, Gold Bond was already winding down. Old-fashioned trading stamps were soon history.

The family shareholders didn't share details of their plans, but they certainly promised that there would be opportunities to do the same thing with the hotel group sale proceeds that Curt Carlson did with Gold Bond profits. The company is 78 years old and has long outlived the Gold Bond business, and the third generation of family shareholders hope to have a business that will last 78 more.

"Letting go of something we love so we can create something new is one of the more difficult things about being a family business in its third and soon to be fourth generation," they wrote. "But it is also one of the most necessary and exciting."