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Progress Report

Radisson Hotel Group Leaders Offer Perspective On Company Progress, Key Industry Issues

Friday, February 28, 2020
Dennis Nessler
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Brand proliferation, the coronavirus and loyalty programs were a few of the topical lodging industry issues that key management execs from Radisson Hotel Group addressed during a press conference at the company’s annual business conference earlier this week.

Held at the Wynn Las Vegas, company leaders also assessed progress in relation to its ongoing five-year strategic plan.

Asked specifically about the coronavirus, Federico Gonzalez, chair, global steering committee, Radisson Hotel Group, downplayed any significant impact on operations thus far, but pointed out the company continues to monitor the situation.

“We need to be exceedingly careful, be very thorough and follow whatever, in this case, the authorities and regulators tell us to do,” he said.

Gonzalez did acknowledge that the company did temporarily close three of its franchised hotels in China. “It was not because there were sick people, but the owners decided to close the hotels because of lower levels of occupancies. We have not closed any of the hotels that we manage. But I would be very careful [to predict] because nobody can escape a situation like this. Anytime, any moment, anywhere things like this can happen,” he said.

When asked by Hotel Interactive® about the potential impact on parent company Jin Jiang International, Gonzalez emphasized they are independent entities. However, he did add, “obviously we have a lot of sympathy and solidarity for anything that may happen to any of our shareholders.”

Meanwhile, brand proliferation continues to run rampant throughout the lodging industry as scores of new flags are introduced by large brand companies. Gonzalez weighed on the impact of the new launches and Radisson’s respective strategy.

“What we are getting is many hotel names. I think a brand takes a significant amount of effort to build. I bet any of you can’t tell me the selling lines for any of the brands from competitors with 30 or 35 brands. A selling line summarizes what a brand does. I think we have a good advantage in the Americas because we have one brand per segment. We are happy with what we have and we have a significant amount of growth [potential] in each of the segments with the brands we have,” said Gonzalez.

Aly El-Bassuni, COO, The Americas, reinforced the point.
“I spend a lot of my time talking to owners with our franchise business, in particular, and they often do business with our competitors. I will tell you the proliferation of brands, the creation of brands almost on a monthly basis, is an issue. You have someone who is invested and occupies a specific space with a specific customer set and the parent company has created another brand that now is going to compete directly for that same set of demand. I see it as a competitive differentiation for us,” he commented.

Karen Richter, SVP and chief commercial officer, has a similar perspective when it comes to the company’s loyalty program compared to that of competitive brands.

“With the number of brands that we have it works well together and it allows for a simple message to the consumer. Where some of our competitors have many brands their line is ‘our loyalty program is simple.’ But is it, because you still have many brands? One of our competitive advantages is we’re operating in this environment of one brand per segment, which is simple. We’re taking this idea of simplicity and really able to weave it through all the aspects of our business, including the rewards program,” she said.

Efram Berman, vp, global loyalty, Radisson Hotel Group, also weighed in while emphasizing the company’s rebranding efforts linking all its brands to Radisson. “When we talk about this proliferation of brands, the loyalty program with a lot of our competitors is a brand, it has a presence in and of itself. Our approach is actually quite different. Our program really does enable each of the brands to be successful and connects the dots for the consumer, but it does that in the background. We don’t want the loyalty program to be the brand we want it to support and facilitate the brands to be successful for our guests,” he said.

In discussing the company’s five-year strategic plan, El-Bassuni noted he is particularly excited about the progress in its repositioning effort despite being met with some skepticism from owners initially.

“Our repositioning effort is not only on target it’s actually ahead of target and that has been a pleasant surprise. I heard when I came on board ‘yeah we’ve been hearing that from the last administration. We’ve seen five-year plans in our time; we’ll believe it when we see it.’ Two years and two months later we’re still talking about it and we have come through with the commitments we’ve made. We have shown that we are putting our investment and our effort into it,” he said.

But El-Bassuni stressed that hasn’t been the only positive development.
“I would say most notable is the change in culture that we’ve installed with our owners and our community, particularly on the franchise side. We showed up as a management team and said ‘we are accessible, we are committed, we hold owners in high regard and we see them as our customer.’ We work really hard to communicate better and more clearly and more frequently. You could just feel the vibe and the energy this week; the engagement has come so far. Before you begin to move ADR, RDI and RevPAR, you’ve got to get buy in and that’s how you get there,” he said.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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