The Radisson Hotel Group officially kicked off at IHIF 2018 as the entities formerly known as Carlson Hotels and Carlson Rezidor seek transformation of brands and asset positioning, including the retirement of Quorvus as the name of its soft brand.
BERLIN—Not many brand reveals or hotel-portfolio reorganizations typically are announced at the International Hotel Investment Forum, but 2018, the convention’s 21st year, has proved a little different.
Carlson Hotels and its European master franchise, the Carlson Rezidor Hotel Group, announced its new identity as Radisson Hotel Group.
Radisson Hospitality, formerly the privately held Carlson, is under the control of CEO and COO John Kidd, while the legal entity of what was Carlson Rezidor is now Rezidor Hotel Group AB.
The soft-brand Quorvus Collection has been consigned to history, replaced by the Radisson Collection.
But the public face, and the umbrella it is hoped will attract more investment and owners, is Radisson Hotel Group, led by Rezidor Hotel Group CEO Federico González Tejera, who was recently CEO of Carlson Hotels and before that NH Hotel Group.
González said he hopes the newly imposed five-year strategic review of the two companies will propel the Minnetonka, Minnesota- and Brussels-based companies into the top three of hospitality firms.
That goal is not defined in terms of market capitalization, but in terms of brand recognition with guests, he said.
The new creation’s management is not concerned with rumors circulating over the future of Chinese company HNA, which owns the Carlson part of the new firm and a portion of the Carlson Rezidor part.
HNA at the end of 2017 made an offer for the remaining part of the Carlson Rezidor it did not own, but that offer was rejected. No more has been heard as to renewed bids.
“We are the management team,” González said. “Rezidor is public; Carlson is private. I should not be worried about who sells stock and who buys them, and everything is more gossipy than knowledge.
“We have today the funds we need to deliver the transformation,” he said, answering a question about HNA and concerns its possible disappearance from the scene could affect Radisson’s ability to go out into the capital markets.
“The current plan in terms of the current transformation is focused on organic growth,” he said, “and we have fixed all the problematic leases in our portfolio. We will now sign leases in key cities.”
What’s in a name?
In some ways, the least important thing is the name change, González said. The five-year plan, established last October, has 25 initiatives aimed at making the company “a true host and the best partner by building on our value creation capabilities so guests, owners and talent see us as the preferred hotel company.”
Currently active in 114 countries—with approximately 1,150 hotels a further 270 in development—the company still must rubber-stamp its name change at its upcoming annual general meeting, González said.
In another change, soft-brand Radisson Collection will be made partially less soft, with so-called “collection-led” hotels adopting the Radisson name and so-called “hotel-led” hotels retaining or going back to a more independent stance.
González said “collection- or brand-led” assets in the current portfolio are in Stockholm; Venice; Moscow; Sochi; Copenhagen; Edinburgh; Warsaw; Lagos; and Agra, India. “Hotel-led” ones are in London, Belgrade; Kuwait; Oman; and Lagos, he said.
“It is practicable to divide it between (those two groups). It would be criminal to destroy the history and equity of some hotels,” he said.
González said the original plan was to have 20 hotels in this group by 2020.
“Now we have already reached that number,” he said, including signed hotels in its pipeline.
Dry beneath the umbrella
González and Kidd said creating a new umbrella firm for all eight brands made sense, and it also comes with an overhaul of the firm’s rewards scheme, meetings platform and website.
González said Radisson Hotel Group has approximately 6,500 meeting rooms among its assets.
He also underlined the need to do a great deal of work over the next five years.
“The new company will totally have a revenue focus to sell beyond rooms,” González said. “More than 500 hotels will be rebranded or repositioned, and there will be termination of some others.”
Monetary help might be available to some owners, he said.
“That will differ. We will offer some financing, with operations needing to meet those owners to devise win-win situations,” he added.
González said other goals to hit by 2022 include having a “concrete (earnings before interest, tax, depreciation and amortization) … and concrete net profit.”
While all the eight brands will be restyled to fit in with Radisson Hotel Group’s new vision of them—for instance, Radisson Blu needs to be “memorable, stylish and purposeful”—its Radisson Red brand will possess “an offering a little more broad than before.”
That brand, González said, will focus on urban and airport sites and has 20 properties open or in its pipeline in the approximately 18 months since it was launched.
Prizeotel, an economy brand started a couple of years ago, has three German assets and seven more in the pipeline, with Rezidor Hotel Group owning 49% of it.
“Twenty-four of the 25 initiatives I believe will bring more value to owners, with the 25th being the owners’ own value proposition,” González said.
“There are gaps in the 25 initiatives, and those gaps differ with geographies, but we know what we need to do, when we need to do it by and who needs to do it,” he said. “There is no negotiation that we need to arrive there.”