Exclusive Feature: An one-on-one interview with Elie Younes EVP and CDO of the Radisson Hotel Group IHIF 2018 Berlin.
1. J.F. Rezidor has recently announced on a name change to Radisson Hotel Group. What is behind the rebranding in terms of vision and strategy?
E.Y. The new Radisson Hotel Group name capitalizes on the powerful brand equity of the internationally-recognized Radisson name. Aligning the group’s portfolio of more than 1,400 hotels in operation and under development will drive stronger awareness amongst consumers with a more consolidated approach to marketing across the group’s eight brands.
Radisson Hotel Group aims to be one of the top three hotel companies in the world. We will reach this goal by executing a five-year operating plan that is focused on initiatives that will deliver an aligned brand architecture, creative hospitality innovations, more streamlined operations and an integrated global platform.
Our vision is to become the company of choice for guests, owners and investors and talent. We have seven key strategies including:
We have developed an action plan for our managed, franchised and leased hotels to increase revenues and profitability in line with brand, segment and standards. It includes an investment for repositioning, rebranding and exiting hotels that are under performing.
Brand & Product Development
We renamed the company Radisson Hotel Group to create extraordinary synergies across all areas of our business and increase effectiveness of our marketing spend and operational performance. We have redefined a new brand architecture giving us more growth opportunities and a robust way to organize our operations and drive customer loyalty.
We have also redefined a brand-differentiated, 360-degree guest experience empowered by a “Yes I Can!” service delivery and four attributes:
- Brilliant Basics
- Memorable Moments
- Local Experiences
- Feel at Ease
We have also developed new standards for Food & Drinks that bring a multi-sensory and memorable experiences to our guests and a value proposition for Meetings, Groups and Events – all in line with the brand experience.
Marketing, Sales & Revenue Management
We have defined a new global organization structure and identified key resources with a global coordination of investments and actions with local business targets. We are reinforcing awareness and media plans with an increased marketing investment of 30% over the next five years.
We have identified key feeder markets per theater and define specific marketing strategies that will improve the cross-theater effectiveness of the investments and we have launched and deployed a new global loyalty program called Radisson Rewards offering enhanced benefits and rewards for our members and professional business partners.
We have also, created a plan for pricing, forecasting and revenue management that will give us a competitive edge and later this year we will launch a multi-brand digital platform that will be among the best in the industry.
We have reviewed our entire portfolio and developed an action plan for every franchised, leased and managed hotel to increase profitability. This best-in-class operating model that will support delivery of key performance targets and quality experience.
Our plan includes a truly global culture and talent management strategy that enables our vision based on four talent pillars:
- An aligned and global culture
- A focus on the end customer
- Engagement with the organization
- Talent retention
We have developed a comprehensive and step change IT program, which allows integration between platforms, flexibility and scalability. We have an approved plan to invest a significant amount in Capex and Opex to create new Property Management and Distribution Systems, CRM and Loyalty platforms, campaign management, and overall IT platforms to ensure we are ahead of the competition and provide an advantage when it comes to marketing, sales, operations and development.
Our approach will be focused only on organic growth and achieving a higher quality portfolio; including an asset-right business model focused on growth that aims to increase the group’s portfolio to 100,000 rooms across EMEA and rooms across the Americas and Asia Pacific.
2. J.F. Your majority shareholder HNA Tourism Group which is part of HNA holdings is in serious financial difficulties. It has been rumored that HNA will have to sell some of its overseas investments. Dose the situation in HNA have an effect on your development strategy?
E.Y. No, it does not have an effect on our development strategy. Our Board of Directors have approved Radisson Hotel Group’s five-year operating plan. We have secured the investments required to proceed independently and autonomously.
3. J.F. M&A: HNA are also holding substantial parts of Hilton and NH Hotels. In the past, there was an attempt to work on a merger (which would have made a lot of sense – J.F.) , As you know, the “name of the game” for each and every hotel company today is distribution. Do you see any near future possibility for merger with NH or any other global hotel company?
E.Y. All questions related to HNA’s financial situation, and investments/acquisition strategy should be addressed to HNA. Our focus right now is on implementing our 5-year operating plan which is based on organic growth.
4. J.F. Your brand portfolio includes upscale full-service brands Radisson and Radisson Blu, A design led full service brand – Radisson RED, Mid-scale full service brands such as Park Inn and Park Plaza, Limited service budget design brand such as Prizeotel, Soft brands: “Radisson Collection”. Dose Radisson consider expending activity into Hostels, Pod Hotels? What about the luxury end?
E.Y. We are currently optimizing our portfolio and have redefined our brand architecture with eight global brands ranging from premium to the economy segment. On March 5, in conjunction with the launch of our new go-to-market name Radisson Hotel Group we announced Radisson Collection™, a premium collection of exceptional hotels in landmark locations with the signature of “Welcome to the Exceptional”. Driven by consumer demand for individuality and more personalized experiences, Radisson Collection groups together the finest hotels in the Radisson Hotel Group portfolio.
Each hotel feels authentic to its location and offers the ultimate model for contemporary living. Radisson Collection hotels are united by modern design and exceptional experiences across dining, fitness, wellness and sustainability. All properties are situated in prestigious locations, close to prime leisure attractions and boast an individual and locally authentic atmosphere.
72% of travelers prefer to spend their money on experiences rather than material things and the Radisson Collection caters to this demand. The hotels that have already joined the new brand are the perfect showcase for what the collection represents; authenticity, design and exceptional service. Ultimately, the brand and the hotels will be defined by the people who visit and our team members who work there.
Radisson Collection will benefit from the power of the Radisson Hotel Group with a strategic market positioning and scale of a global brand. All member hotels have a flexible framework for affiliation: those wanting to build market recognition can choose to lead with the brand or lead with the hotel, reinforcing existing market recognition and adding to their investment with services, support, infrastructure and loyalty designed to optimize return on investment.
Radisson Collection Led Hotels:
- Radisson Collection Strand Stockholm, Sweden
- Radisson Collection San Marco Venice, Italy *
- Radisson Collection Ukraina Moscow, Russia
- Radisson Collection Royal Copenhagen, Denmark
- Radisson Collection Royal Mile Edinburgh, Scotland
- Radisson Collection Warsaw, Poland
- Radisson Collection Ikoyi Lagos, Nigeria
- Radisson Collection Agra, India
Hotel Name Led:
- The May Fair London, A Radisson Collection Hotel, United Kingdom*
- Old Mill Belgrade, A Radisson Collection Hotel, Serbia
- Symphony Style Kuwait, A Radisson Collection Hotel, Kuwait
- Hormuz Grand Muscat, A Radisson Collection Hotel, Oman
- The Emerald Grand & Spa Lagos, A Radisson Collection Hotel, Nigeria
- The ASO Towers & Residences Abuja, A Radisson Collection Hotel, Nigeria
*Pending final legal agreement and approval
As part of the new global brand architecture launch, Rezidor will reposition 30-35 of its hotels with a total Capex of €140-150 million. We will also invest €75-€80 million in form of industrial investments to stimulate growth.
5. J.F. Over the last decade Radisson Hotel Group has established its reputation mainly in the European continent. We see in the past 3-4 years a move to Africa and the Middle East. Are you going to move also on to Asia South America, Australia? if the answer is yes, which brands will you focus on?
Growth Strategy in Europe, Middle East & Africa
E.Y. In EMEA our objective is to rejuvenate mature markets while continuing to accelerate expansion in emerging destinations. We now offer our partners all business models from industrial investments to leases and of course management and franchise contracts.
In Europe, we will use an asset-right approach, this means the right transaction for the right partner and the right location.
We have analyzed various markets and cities across Europe and have identified 60 cities, in which we would commit to growing our portfolio.
We have also identified 8 focus countries where we see opportunity for scaled growth: UK, Germany, Poland and Italy in mature markets, Russia, Saudi Arabia, UAE and South Africa in emerging markets
- The new global architecture gives us an enormous opportunity to cover a wider portfolio. Our focus will remain on upscale / upper upscale segment.
- We will expand our brand architecture and portfolio footprint:
• Through the creation of Radisson Collection starting with the conversion of some 15+ existing Radisson Blu hotels
• Introduction to the Radisson brand in EMEA in the upscale segment
• Reposition Radisson RED towards upper upscale in the lifestyle select segment
Growth Strategy in Americas
As part of our five-year strategy in the Americas, we see significant room for growth across all brands and have identified key target markets where we plan to be very aggressive with our Radisson Blu and Radisson RED brands, particularly in the U.S. We plan to tighten the consistency and quality of our core Radisson brand hotels, while introducing a refreshed visual identity, product design and guest experiences.
We aim to accelerate the transformation of our Country Inn & Suites by Radisson hotels to our Generation 4 product, which has been well received by our Generation 4 owners and has resulted in improved NPS scores from our customers. Also, based on our European prototype, we see Park Inn by Radisson as a fresh and exciting brand in the Americas, delivering a colorful and affordable hotel that appeals to both business and leisure travelers.
Growth Strategy for Asia Pacific
Asia Pacific (APAC) continues to be the most promising and energetic region of the world, outperforming most of the world’s markets. Our steady growth momentum has benefited qualitatively and quantitatively from the portfolio of brands (Radisson Blu, Radisson, Radisson RED, Park Inn by Radisson, Park Plaza and Country Inn & Suites by Radisson) that we represent in APAC.
With the five-year-plan, we anticipate seeing healthy underlying business performance, coupled with strong growth trajectory, in all of our brands. In China, we intend to build on our existing strengths in key cities, while targeting aggressive growth in second tier cities. We are looking to expand our mid, upscale and lifestyle segment with the Radisson, Park Inn by Radisson and Radisson RED brands.
For Southeast Asia Pacific, we will strengthen our presence in emerging markets and gateway cities. There are strong opportunities across all brands in countries such as Thailand, Indonesia, Vietnam, Japan and Australasia.
In India, we continue to enjoy first mover’s advantage as one of the country’s leading international hospitality groups. Our strategy remains focused on expansion into secondary and tertiary markets with good traction and identifying unique downtown locations. We believe upscale and midmarket brands such as Radisson, Park Inn by Radisson and Country Inn & Suites by Radisson brands are well suited.
With core expansion priorities in anchor APAC markets and well-placed dedicated resources, we are optimistic and in a prime position to double our portfolio size in the mid-term.
6. J.F. We see “new” hotel companies storming into the market with great success. Brands like NOVUM, LEONARDO. They use a different management ownership, willing to take leases, minimum guarantees, JV’s. How far would Rezidor go in order to get projects into the pipeline?
E.Y. As mentioned before we have launched a renewed asset-right growth strategy. We now offer our partners all business models from industrial investments to leases and of course management and franchise contracts. To grow and compete in mature markets one has to be open to leases and other forms of commitments driven by the nature of the investors in those markets. prizeotel for example is a purely lease driven business model.
Our board is fully supportive of our strategy and has approved substantial investments in form of key money and other forms of industrial investments. Our plan will see us spend some €80million in cash commitments over the coming years on top of some €300million financial commitments in form of leases & guarantees.
7. J.F. What is your own view of Airbnb coming now into the hotel scene?
E.Y. Airbnb has begun showing some hotel offerings on their platform and may be planning to move into the more traditional hotel business. Travel and hospitality is only growing, and we anticipate new business models to meet the growing demand. Airbnb did an excellent job taking advantage of the sharing economy to leverage digital platforms and under-utilized inventory.
The hotel and hospitality industry has been affected by increased competition and new choices for travellers through these peer-to-peer networks. However, there was a dark-side to their business providing a platform for commercial operators to run illegitimate, unregulated and often illegal hotels in communities and countries across the world, perhaps they are realizing they need a more sustainable way to grow their business.
We remain committed to providing safe and responsible hospitality solutions. The Rezidor portfolio as part of the larger Radisson Hotel Group is focused on being a true host and providing memorable experiences that go beyond just lodging. Our hotel brands are focused on providing authentic local touches, stylish living design, vibrant social scenes and unique locations – important distinctions and experiences that an Airbnb cannot deliver consistently.
We have learned lessons from the power of disruption and thinking differently. We are leveraging big data and digital platforms to provide our guests with more choice and personalized service that create memorable experiences.
8. J.F. The boarders between operating companies and marketing and distribution companies are blurring. Many owners are simply saying that they are paying far too much for the brands on top of their marketing cost. Do you hear this is some of the negotiations you are having? What are you doing differently?
E.Y. The way of distribution and our channel mix has changed significantly over the last few years with OTAs gaining more and more market share. The impact of a brand and its distribution strength is sometimes difficult to measure as it contributes more than just what comes through the proprietary brand web. About 50% of our business is direct – is it because the hotel just happens to be there or is it because customers trust the brand associated with the hotel property? We value influenced business, business that we bring to the hotel through different channels of influence – direct and indirect.
With our new global umbrella brand, Radisson Hotel Group, we aim to generate a stronger brand awareness – online and offline, drive business through our new multi-brand website radissonhotels.com, our new online marketplace serving as a single online touchpoint for all brands, and our renewed loyalty scheme Radisson Rewards.
9. J.F. Marriott, Hilton put a lot of funding into R&D testing new technologies, Smart rooms, Apps, Keyless entry. What does Radisson do to stay ahead?
E.Y. We have invested in IT which allows integration between platforms such as CRM, loyalty campaign management, and overall IT platforms to ensure we are ahead of the competition and provide an advantage when it comes to marketing, sales, operations and development. We are leveraging data from these platforms to develop unique and personalized technology solutions that provide smart applications for our guests whether it is through the booking experience, in-room, for meetings, food & drink or rewards.
10. J.F. In your opinion what are Radisson’s USP’s vis-à-vis its competitors?
E.Y. True Operators & Hoteliers – Radisson Hotel Group is a unique company run by true operators, offering the right ownership and managed services for each situation, our experience includes managed, franchised, leased and owned hotels
Global portfolio of brands – We have engineered our global portfolio of brands to meet the needs of the changing travel sector. We have clear brand segmentation with no overlapping and new business lines such as serviced apartments
Investments in Revenue Optimization – Over the next five years, we are making significant investments including a 30 percent increase in marketing, a data intelligence hub and a new forecast and revenue management system.
Investment in IT – Over the next five years, we are also making significant investments in our platforms and technology
Powerful Commercial Drivers – Our commercial drivers will drive revenue across the system including a refreshed Rewards program called Radisson Rewards, a strong meetings and Conference program called Radisson Meetings and by the end of the year a new multi-brand booking system.
Flexible and approachable – Our solutions for owners and developers are unique and customized to fit their needs and realize their vision.
Joseph Fischer is the CEO of Vision Hospitality & Travel - An international lodging & hospitality consulting firm. He is a veteran hotelier with over 30 years of extensive management experience in the global lodging Industry. A strategic “out-of-the-box” thinker, visionary, with plenty of tangible and ready-to-be-implemented ideas. Joseph is a frequent contributing writer on 4Hoteliers.com global new portal.
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