MIAMI—In its first Americas Business Conference since being acquired by Chinese-based Jin Jiang International Holdings Co. Ltd., Radisson Hotel Group (RHG) is plotting the course moving forward both after the acquisition and the implementation last year of its five-year strategic plan going forward.
Jin Jiang transition
Radisson leaders are working with Jin Jiang to integrate the customer bases of the two companies. “We have had very intensive discussions since we got together in November last year,” said John Kidd, CEO/COO of Radisson Hospitality. “We have had many rounds of very serious meetings on the technological front and with regard to branding and loyalty, in Shanghai, Brussels and Minneapolis. With regard to the partner companies, we have a tremendous communication line already. That has been fostered very much by Jin Jiang. They have been very forward-looking as far as that is concerned… There are discussions about hotels we can work together on in different parts of the world, because we have definite strengths.”
Given the large number of Chinese guests interested in traveling outside of their home country, Radisson is working with integrating Jin Jiang’s clientele to make it easier for them to stay at Radisson properties. “The consumer bases are quite different in terms of their traveling habits, how they book and where they stay,” Efrem Berman, Radisson’s VP of global loyalty, told Hotel Business. “In the near term, for American hoteliers, the opportunity is: How do I attract the Chinese traveler? The growth in that market is incredible; how do we start to become plugged into their distribution networks?”
Berman said the first component of this evolution is exposing the RHG properties to the Jin Jiang customers. “They have the WeHotel program. It is their loyalty program, their booking and PMS systems,” he said. “It is really an integrated piece. We want to make sure that we can extend the value of the Radisson Rewards program to WeHotel members.”
He continued, “That concept of familiarity, especially for someone who is being exposed to a new part of the world, is so important. We want to keep that at the core of everything that we do.”
In addition to helping Chinese travelers, there is also a benefit for the hotels outside of China. “It allows the hotels we have outside of China to benefit from this growing population, which is fantastic as well,” he said. “We want to make sure, from an operations perspective, that we are being mindful to our hotels and not burdening them in a way where now they have to do all this other stuff. How do you plug into a network that makes sense? How do you take advantage of infrastructures that we have, like Radisson Rewards, to deliver value to a new traveling base that you are going to get access to without a new set of standards that they need to learn and deliver on?” These are questions RHG plans to answer for its hotels.
Five-year plan progress
Radisson also detailed the progress it has made since the implementation of its five-year strategic plan.
As part of the plan, Radisson removed 18% of its room inventory from the Radisson brand. Ken Greene, Radisson Hotel Group’s president for the Americas, spoke of the implications of that decision. “From a strategic perspective, it is an easy decision,” he said. “If you don’t meet the standards, if you are not willing to meet the standards, you have no business being part of the brand.”
From a financial perspective, it was a very difficult decision. “Many of us have been a part of a public environment, and have been part of brand cleanup plans, and it’s tough, because you live quarter by quarter, and to lose revenue today because you think that is the right long-term financial strategy is a hard thing to do,” he said. “If you don’t make the decision to do it, then you live in this constant cycle of never really getting to achieve the financial goals that you want to. At some point, you have to do it the right way. What is great about us is we are a private company today. We made the right decision. It can be painful financially today, but the returns over the long run are so fabulous because you have the right properties in the right marketplace, the right locations, doing the right things, with the right owners. That is a very powerful statement.”
He said the decision came down to keeping owners who do things the “right” way. “At the end of the day, I would leave you with this: The decision really becomes do you want to keep somebody who is not doing everything, at the expense of losing one of the owners who is doing all those things?” he asked. “Because the folks doing all the right things will leave. It becomes a fairly simple decision.”
It was also a difficult decision from an owner point of view, according to Kidd. “We do value and treasure all of our owners,” he said. “It was never a case of kicking an owner out… We approached the owners, and we said, ‘This is your project, this is where it is, this is where it has to get to. Can you get there? Can we help you? Can we help you financially? Can it be done?’ In 18% of cases, it just wasn’t going to work out; the finance math wasn’t going to pencil out. We had to part company in that state. It was very difficult in the short term for those reasons.”
But, he said, it needed to be done. “Getting to the strategic import, that is why we are here at the end of the day—we are building something for the future,” he said. “We spent an inordinate amount of time in the first year designing and developing the strategic plan, so we had to make these decisions to ‘prune the rose bush,’ so the rose bush in the next season is going to bloom really, really beautifully.”
New designs unveiled
Radisson also took the opportunity of the conference to reveal the new prototype model room for the Park Inn by Radisson brand.
The new contemporary design targeted at the upper-midscale market provides comfort, while maximizing space within a compact footprint. Each room is constructed to highlight the core essential brand pillars: Connected, Positive and Contemporary. The dynamic design scheme throughout each hotel also adds an energy aimed to lift the mood of every guest from leisure to business travelers, according to the company.
During the conference, the company also unveiled a concept for the next generation guestroom design for the Radisson Red brand in the Americas. The room includes a contemporary and edgy design for primarily urban markets. HB