Mar062010

Carlson Hotels 5 Year Global Strategy

The $1.0 to $1.5 billion hotel investment pledge by Carlson Hotels is one of the news items hitting the hotel industry press over the past few days. The plan is to establish flagship Radisson Hotels in about five key U.S. cities and revitalize the brand image in the Americas by upgrading or shedding existing Radisson hotels in the U.S.

I attended the Carlson Hotels Global Business conference in Orlando this week titled 2010NE. You may wonder, like I did, what NE stands for? Actually the title design is meant to invoke the theme of ONE company moving forward together.

The conference opened with a couple of fast-paced video slideshows displaying Carlson brand hotels around the world set to the music of the U2 songs “One”, “Beautiful Day”, and “Elevation”.  The conference at the Gaylord Palms Resort and Convention Center in Orlando (not a Carlson hotel) was attended by 1,200 or so Carlson Hotels management personnel, hotel general managers, hotel owners, investors, and 25 or so media persons. It was a truly global audience.

Carlson Hotels unveiled a grand initiative to put money into a comprehensive development and expansion of the individual hotel brands of Radisson, Park Inn, and Country Inn & Suites and make a concerted effort to garner the recognition a hotel company of this size should have in the U.S., although the Americas is just one aspect of the global development project. Carlson Hotels has over 1,000 hotels and is slightly larger than Starwood Hotels globally.

There is a focus on development in India, China, Russia, Mexico, and Brazil as markets for prime growth potential.

Park Inn, launched in 2003 and primarily in Europe, is a mid-scale hotel brand with around 100 hotels at this point. Park Inn hotels are being promoted as a trendy, vibrant value brand. I saw some model rooms and the design concept reminds me a bit of Starwood’s aloft hotel brand.

Park Inn design model

Country Inn & Suites is the largest brand by number of hotels in the Carlson Hotels chain. The 500th hotel will open next month in Texas. The five year plan is to have 750 to 1000 hotels in the Country Inn brand. Average daily rate for Country Inn is estimated at $85 in 2012.

Radisson Hotels are currently at 422 open properties with 90 additional hotels in the development pipeline. The stated five-year plan is to have between 600 and 800 hotels by 2015. There are some impressive looking Radisson Hotels around the world. Radisson Blu Frankfurt is one iconic piece of architecture featured in most of the promotion materials. And the Radisson Blu Berlin has the largest cylindrical aquarium in the world according to the website. The idea is to have Radisson Blu hotels (with lounges) fill the upper-upscale market segment, while Radisson (green) will be an upscale brand. The name will not actually be Radisson “green”, however, that moniker was used during the conference to distinguish the two different tiers for the Radisson brand that are envisioned.

I sure would like to see a world class Blu property in San Francisco. The Radisson Fisherman’s Wharf pales in comparison to Radisson Hotels I have seen in Europe and hotels featured at the conference.  Sorry Radisson Fisherman’s Wharf, you have a great location (some rooms have close-up views of the Bay across the street), but externally you look like a tourist motel to me.

Radisson Fisherman's Wharf, San Francisco

The other Radisson Hotel in the San Francisco area is the San Francisco Airport Radisson, next to Hilton’s Homewood Suites, a few miles north of the airport.  This is a newer hotel (six years old?) with a more upscale appearance than the city hotel.

Radisson San Francisco Airport

The financials show Radisson is an underperforming brand in the US compared to Europe where it has a solid reputation. The message from the conference is Carlson Hotels seeks to address the inconsistent standard of Radisson Hotels in the U.S. and improve the brand’s image.

One of my favorite statements from the conference was,

“The guest takes nothing away from the hotel except memories and emotions.”

A couple of statistical items I found interesting.

–  only 10% of bookings are made through Carlson hotel brand websites and the goal is to reach 30% by 2015. That is a lot of loyalty points being left on the table by hotel guests.

– The company currently has around 5 million members in goldpoints plus and has a stated target to enroll 1 million additional members in 2010 and a goal to reach 10 million members by 2015. In comparison, I recently saw some numbers showing HHonors has around 25 million members and Priority Club 47 million.

Sounds like more promotions will come our way as frequent guests.  And competition is always good.  Another big loyalty program player on the hotel scene will mean opportunities for the frequent guest.

My interest remained focused on the goldpoints plus loyalty program. I had the opportunity to speak for about an hour with Heather Passe, the management leader behind the analytics of goldpoints plus and instrumental in getting the recent reduction in points required for the high end hotel category awards. I will talk about goldpoints plus in a later post.

What an experience for me to have a glimpse of the hotel industry from the other side of the desk!

I live in the bubble of loyalty programs, social media, and the guest rooms where I sleep. My perspective has always been as a guest. There are so many aspects to a hotel company that I never considered and it was an eye-opener to talk with hotel owners, general managers, and Carlson Hotels management personnel.

During my time at the conference I kept thinking of this dialogue scene from the Cameron Crowe movie, “Almost Famous”.

More to come…

Link: Carlson Hotels Unveils Ambition 2015 Strategy

Radisson Showcase Model Room

Disclosure Notice: My standard room at the Gaylord Palms Resort and Convention Center Orlando (not a Carlson Hotels property) was paid by Carlson Hotels for March 3-6, 2010 as a press media attendee of the Carlson Hotels global conference.

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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