Feb262014

Carlson Rezidor Hotel Group From Ambition 2015 to Vision 2020

In March 2010 Carlson Rezidor Hotel Group launched Ambition 2015, a 5-year plan to transform the hotel company into a more competitive player with other major global chains. Last week the hotel company held its Radisson & Radisson Blu Americas Conference at the Radisson Blu Mall of America in Bloomington, Minnesota and announced its next five-year campaign as Vision 2020.

[Blogger disclosure: I received a 3-night complimentary stay at the Radisson Blu Mall of America as a media attendee for the conference. This is my 5th year attending the Americas conference.]

Carlson Rezidor Hotel Group is one portion of the Carlson holdings that also include the restaurant chain TGI Friday’s and the global travel agency Carlson Wagonlit Travel (CWT). The hotel brands of Carlson Rezidor include Radisson and Radisson Blu, Park Plaza, Park Inn and Country Inns & Suites.

Notes from the Mall

Carlson Rezidor Hotel Group signed 100 hotels in 2013 with 62% of the new hotels outside the USA.

The conference began with a presentation covering lodging trends. A 2012 report from the School of Hospitality Research at Cornell University was cited for its findings regarding the ROI of social media. The Impact of Social Media on Lodging Performance report is available upon registering with the site.

Three main findings in that report:

  1. Potential hotel guests increasingly use TripAdvisor to read reviews before booking.
  2. A hotel that can raise its review by 1 point on a 5-point scale can raise room rates by 11.2% without a drop in occupancy.
  3. A 1% increase in a hotel’s reputation score correlates to 0.89% increase in room rate and a 1.42% increase in revenue per available room (RevPAR) which is the hotel industry standard of profitablility.

Carlson boiled this down to one simple phrase: Guest experiences are the most meaningful aspect of a hotel stay. 51% of guests are willing to pay more for a hotel room that offers a great guest experience.

Factors influencing a hotel stay purchase decision

  1. Meaningful guest experience.
  2. Location
  3. Price
  4. Loyalty Program
  5. Promotions

Experience trumps price.

The theme of the 2014 conference was “Imagine”. There were some John Lennon photos and snippets of song playing at times. Carlson Rezidor has amazing video production for their shows and I have been impressed many times over the years at the quality of their video presentations.

Carlson Imagine

Imagine in reverse with the word ‘NOW’ in white is a clever conference slogan.

Two New Brands – Quorvus Collection (luxury) and Radisson Red (Upscale lifestyle)

Carlson Rezidor Hotel Group as a hotel chain is lacking a luxury brand. Quorvus Collection is designed to address that gap by signing currently independent hotels in the luxury market segment to the new Quorvus Collection brand to roll out by the end of 2014. Quorvus Collection will be something like Starwood’s Luxury Collection.

Carslon Rezidor Hotel Brands

Quorvus Collection will occupy the luxury market segment.

The plans are to have 20 Quorvus Collection properties and 60 Radisson Red hotels by 2020. Possibly, some Radisson Blu hotels may rebrand into Quorvus Collection. The primary focus will be Europe, Middle East, Africa and Asia.

Radisson Red is designed to meet the market demographic of the millennial traveler. The idea is to have a fresh hotel brand to compete in the upscale lifestyle market segment with hotel brands like Hyatt Place, Starwood’s Aloft and Element, Wyndham’s Tryp, Marriott Courtyard, Hilton Garden Inn and IHG Hotel Indigo.

The different colors of Radisson

The top 6 ranked hotel brands in JD Power Hotel Guest Satisfaction 2013 survey for the upscale market segment are lifestyle brands.

  1. Hyatt Place
  2. Hilton Garden Inn
  3. SpringHill Suites (Marriott)
  4. Aloft (Starwood)
  5. Hotel Indigo (IHG)
  6. Courtyard (Marriott)

DoubleTree, Radisson, Four Points and Crowne Plaza are the lowest rated upscale brands in the JD Power survey in order of DoubleTree being highest of these and Crowne Plaza lowest rating in guest satisfaction. Four Points and Radisson received identical scores of 2 out of 5 in all categories, except room rates at 3 out of 5.

Radisson in the USA is not a highly rated brand.

Radisson Red will launch in 2015. The plan is for a global brand that will likely open its first hotel in the EMEA region and then focus on the USA. These will primarily be new construction hotels, but may possibly be some rebranding conversions.

Lifestyle select is the high growth hotel market segment. The difference between full-service and select-service is generally limited restaurant facilities.

In Europe, Radisson Blu is the largest chain upscale brand with 188 hotels. Hilton has 146 and Marriott has 87 hotels. Park Inn has 103 hotels in Europe. The image of these brands is far better recognized in Europe than in the USA.

An interesting data point is Best Western blows away all the other midscale brands in Europe with over 1,400 hotels. That is more than 3x the number of hotels in the other leading brands of Mercure (514), NH Hotels (314) and Holiday Inn (276) combined. Novotel at 248 is the only other brand with more than 200 hotels in Europe.

Radisson Blu and Park Inn are the leading global hotel chain operating in Russia with 36 hotels and another 19 in the pipeline. IHG, Accor and Marriott are the next biggest players in Russia.

Rezidor Hotels is currently the largest hotel operator in sub-Saharan Africa with 14 hotels. Marriott’s big Africa hotel deal with Protea expected to close in April 2014 will change that data point when Marriott brands 116 hotels and becomes the largest hotel chain in Africa.

Welcome to the new Millennials

The hotel industry is focused on millennials. These are the age cohort of people born between 1980 and 2000. Apparently, based on research I have seen, these are the ‘ME’ generation that wants personalization and immediate gratification.

  • Millennials are 89 million in U.S. today.
  • Millennials represent 21% of U.S. spending.
  • Target audience of connected consumers will reach 185 million by 2030.

The hotel industry loves the ability to data mine this target demographic through their use of social media like Facebook and Twitter to determine their personal preferences.

Last year I attended the Americas Lodging Investment Summit and listened to the top executives tell us that the industry is moving beyond a points-based loyalty system.

The Big App

A key component of the Radisson Red brand will be the Big App. This mobile app is designed to allow consumers to handle much of their hotel stay needs over their connected devices.

A couple weeks ago I read a Hotel News Now piece on personalization for millennials. The opening line grabbed my attention: “Forget points-based loyalty programs. Millennials can only be wooed by personalized hotel experiences. The problem, ALIS panelists said, is how to pay for it.”

The piece went on to provide insight on the use of a hotel app for on-demand service from John Wallis, Chief Marketing Officer for Hyatt,

Hoteliers are exploring new methods of communication to keep pace. Hyatt, for instance, has developed a Twitter concierge that answers guests’ questions 24/7. 

The company also tested an app through which guests could request items from housekeeping, among other functionalities. The project was a failure, Wallis said. Guests who requested something using the app wanted it immediately. Those who called via the in-room phone typically gave up to 40 minutes leeway. 

“It made us really think through … friction-free interconnection to change operations to deliver it fast. Otherwise we have a great app that’s being used but we’re dissatisfying customers,” he said. 

Personalization equals loyalty for millennial – Patrick Maycock, Hotel News Now – February 4, 2014.

Many of the pieces of information I heard at the 2014 Carlson Rezidor Hotel Group Radisson & Radisson Blu Conference for the Americas reminded me of statements I have heard at hotel industry conferences and read in the hotel industry literature over the past 15 months.

Carlson Rezidor Hotel Group has ‘Vision 2020’ as do other hotel groups creating an evolving space to meet the needs and demands of hotel guests.

As long as there is a good bed and space to rest my head, I’ll watch, see and write about how far we evolve as consumers and hotel brands and loyalty programs approaching 2020.

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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