Radisson Hotel Group executives answered the owners and media’s most pressing questions during the company’s 2020 Americas Business Conference.
LAS VEGAS—One of the first questions asked of Radisson Hotel Group executives during both a news conference and town hall meeting with owners is the status of the search for a new president overseeing the Americas.
Everyone can expect an update in mid-March, said Radisson Hospitality President and CEO Federico González.
While González was not able to provide any further details about the executive search, COO for the Americas Aly El-Bassuni added one extra bit of information during the town hall session.
“I can tell you it’s not going to be me,” he said, getting some laughs from attendees.
The executive leadership team at Radisson Hotel Group addressed a wide range of topics, including the coronavirus (COVID-19), the company’s brand portfolio and Radisson’s loyalty program, Radisson Rewards.
Radisson’s geographic footprint is diverse, so while the company’s hotels have seen lower occupancy than originally expected in China, its overall presence in the country is relatively small, so the effect of the coronavirus outbreak hasn’t been that large, González said during the news conference. Three of its managed hotels in the country have closed, but that was a decision made by the hotels’ owners because of the lowered demand, he said. In the Asia/Pacific region, the company has seen a 10%-to-15% effect in some of its locations, and those are mostly managed fees, he said.
There hasn’t been much of a short-term effect across the Middle East, Europe or Africa, he said, noting that there were new reports coming out about Italy at the time. There have been no major effects in the U.S., either.
During the town hall, Chief Commercial Officer for the Americas Kristen Richter said her team is watching general pace and property-level pace for patterns. The company is taking guidance from the authorities as well as the global travel industry as a whole, such as extending cancellation policies for people traveling to or from China, she said.
Number of brands
Brands take a significant amount of effort to build, and Radisson has done well with its architectural exercise of having one brand per segment, González said.
“We have still many places to grow and many hotels to open before we feel any of those spaces are full,” he said.
Having a smaller portfolio of brands makes the choice for prospective owners to choose when opening a new location compared to the high number of brands competitors offer, González said.
The company has been strict in brand standards; that’s why it has taken its repositioning strategy so seriously, he said. That’s also why the team has no doubt when exiting a property that doesn’t fall in line with brand standards. What kills a brand is keeping those in the system that don’t represent what the brand stands for, he said.
In speaking with owners and franchisees, El-Bassuni said he hears often that the proliferation of hotel brands is an issue for them.
“You have someone who’s invested and occupies a specific space with a specific consumer or customer set, and the parent companies create another brand that is now going to compete directly for that same set of demand,” he said.
Having a smaller portfolio of brands to choose from is a competitive differentiator for Radisson, he said.
While the company isn’t looking at adding new brands to the portfolio, El-Bassuni said during a town hall session with attendees that Radisson is working on an extended-stay tier for its Park Inn by Radisson brand.
“We’re working on it as we speak, and we hope to have it available this year,” he said.
It would be a different offering in a different segment that requires a different set of skills, so the company needs to be prepared to support owners and make it successful, he said.
Along with the proliferation of hotel brands created by competitors is the concept of a hotel loyalty program being a brand presence in and of itself, VP of Global Loyalty Efrem Berman said during the news conference. Radisson’s approach is quite different, because as a global program, it enables each of its brands to be successful and connects the dots for the consumer, he said.
When the company rebranded the loyalty program and organization, the team made sure the word Radisson flowed throughout it was a good facilitator for that to happen, he said.
The simplicity of loyalty programs ties into the company’s brand portfolio, Richter said. It allows for a simple message to the consumer compared to competitors’ loyalty programs and their many brands, she said.
“One of our competitive advantages is where we’re operating in this environment of one brand per segment, which is simple,” she said. “Weaving the Radisson Rewards program through that model, which is again simple. So we’re taking this idea of simplicity and really able to kind of weave it through all the aspects of our business, including the rewards program.”