FRANKFURT, GERMANY—Change is underway at Carlson Rezidor as the brand focuses on its future. Among it’s notable changes—the rebranding of the company into Radisson Hotel Group.
The move is part of a five-year operating plan that seeks to exploit opportunities in terms of revenue growth and portfolio optimization. The overall goal is to get the profit in line with the market and create a strong growth platform to solidify its future sustainability, according to the company.
“Over the next five years, we will build on our unique service heritage of making every moment matter for our guests, owners, shareholders and employees by being a true host and best partner,” said Federico J. González, president & CEO, The Rezidor Hotel Group AB. “Success of our five-year operating plan means that whenever a guest plans a trip, whenever an investor or owner thinks of a partner, whenever a person wants to work in hospitality—they will all think of our company first.”
Based on an analysis of the current performance and future upside of the business, Rezidor aims to deliver revenue growth of 6-7% on an annual basis. The EBITDA margin is expected to reach 13-15% by the end of 2022. As investments are needed to successfully achieve these targets, the performance will be modest over phase one of the operating plan (2018 – 2020) where basics of growth will be put in place. The company expects higher growth between 2021–2022.
As part of the new global brand architecture launch, Rezidor will reposition 30-35 of its hotels with a total CapEx of approximately $171 million to $184 million (€140 million to €150 million). The company will also invest $92 million to $98 million (€75 million to €80 million) in FF&E and key money in new hotels. The business development strategy will focus on net opening of 13,000 new rooms. As part of a renewed asset-right growth strategy, Rezidor will also focus on entering new lease agreements in mature markets.
The new RHG brand, the brand architecture, and the new brand experience will enable the company to capture the full potential of the portfolio globally, according to company.
Among the opportunities identified are the following:
- Leverage the wide awareness of the Radisson brand name globally and capture efficiencies
- Enhance brand architecture and solve issues within portfolio (overlaps, brand definition, standards misalignment)
- Create a clear unique selling proposition that differentiate the brands from the competition, with a single global direction
- Improve brand experience, creating a competitive advantage and with consistent quality across hotels and theaters
Key plan elements include the following:
- Launch Radisson Hotel Group company name
- Define the new brand architecture, and new brands strategy
- Define key positioning elements for each brand and strategy by market
- Redefine guest experience to build relevant and strong brands while being sensitive to local needs and competitors
In addition, the company will leverage the new umbrella brand and redefine the current brand architecture to fully take advantage of pricing opportunities.
Key actions include the following:
- Leverage Radisson global brand awareness to create an umbrella brand, RHG, that aligns go-to-market strategy globally and increase marketing efficiency
- Focus the strategy and the investment on the urban and business segment under the Radisson brands with four segments—Collection, Blu, Radisson, and Red
- Redefine the Park Inn brand to adjust to midscale target (ADR, construction cost and GOP) while converting some properties to Radisson