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Carlson Rezidor Getting Ambitious

Halfway through their five year plan Ambition 2015, Carlson Rezidor is making some big inroads.

Wednesday, February 27, 2013
Glenn Haussman
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Carlson Rezidor is searching for its sweet spot. That perfect place in which their brands connect with customers in exciting ways, driving brand loyalty and allowing the company to garner premium pricing.

But getting there takes ambition, and in Carlson Rezidor Hotel Group’s case that’s covered under their five year plan: Ambition 2015. Launched in 2010, the plan was meant to do nothing less than completely reinvent the stalwart lodging company into a major global competitor.

And halfway through the plan, its executives are saying they’re meeting and exceeding pre-set benchmarks and are on their way to being one of the world’s most dynamic lodging companies.

“Carlson Rezidor is in a very, very strong spot. Make no mistake about that. We have fantastic progress,” said Thorsten Kirschke, president, Americas, at this year’s Carlson Rezidor Full Service Brands Business Conference being held this week at the Radisson Blu Aqua in Chicago.

Radisson Blu, in particular, is a brand the company is heavily focused on and is set to be a main driver of hotel growth for many years to come.

In 2012 the company debuted 33 new Radisson Blu hotels around the world and now has 272 total hotels. Additionally, Radisson Edwardian Hotels completed rebranding to Radisson Blu as announced at last year’s conference and includes 13 four- and five-star hotels in the city center of London and a five-star hotel in Manchester.

A flagship property set to open in Minneapolis at the Mall of America in just two weeks’ time. “This makes Radisson Blu a true flagship anchor product for our full service portfolio,” said Kirschke, adding the brand will open in gateway cities around the globe. He also announced the conversion of the Radisson Plaza-Warwick Hotel Philadelphia to Radisson Blu this year and Radisson Plaza Hotel Minneapolis in 2014.

It’s expected 21 Radisson Blu hotels will open in in 2013, in destinations such as Sochi, Russia; Chongqing Sha Ping Ba, China; Guwahti, India; Kolkata Hastings, India; Radisson Libreville, Gabon, Africa; Mysore, India.

Meanwhile, at Radisson Kirschke said the brand is starting to grow more rapidly now in Asia, and many existing hotels are being renovated. In fact, since Ambition 2015 began 20 percent of the portfolio was removed from the system to increase quality. Additionally, 50 percent of the remaining hotels have been renovated and repositioned with another 25 percent set to be renovated and repositioned this year.

“The game is different now and we are working hard on repositioning by improving the physical product. This is not the same brand you know three years ago and it shows with guest satisfaction and market share, which has significantly improved,” said Kirschke. “Our brand has gained a lot of respect since we have been transforming it to where it is today.”

Radisson now has 426 operating hotels and those hotels that have completed property improvement plans are showing positive growth in Revenue Generation Index (RGI) 4.8 and RevPAR 8.9 percent. Kirschke also said that 60 percent of the brand’s growth is coming in emerging markets. And as they infiltrate those markets they are grooming future global travellers to know and stay at the Radisson brand. Kirschke expects 80 more Radisson hotels to debut globally in 2013.

Meanwhile Park Plaza saw RevPAR growth and record-level guest satisfaction of 8.3. Additionally the first three Park Plaza Resorts opened in Croatia, while eight major renovation projects completed across hotels in Amsterdam, Berlin, Budapest and Leeds, according to Carlson Rezidor.

At Park Inn by Radisson, nine hotels opened growing the portfolio to 194 hotels and more than 36,000 rooms in operation and under development. Fifty new hotels were signed in 2012 and are in various stages of development.
Kirschke also said its loyalty program Club Carlson has reached 10 million members, about 10 months sooner than they expected. More than 2.5 million people were signed up at the hotel level during the past three years.

Other highlights according to Carlson Rezidor include:
  • The group’s sales and marketing spend increased 80 percent over the past three years – from $100 million in 2009 to $180 million in 2012
  • Club Carlson loyalty program membership grew to 10 million, up from 8 million at the end of 2011, from 6.3 million at the end of 2010 and 5.1 million at the end of 2009
  • Launched new partnerships including a suite of Club Carlson U.S. Bank Visa credit cards. Cardmember accounts to date are exceeding expectations – nearly triple the number of expected accounts since the launch in Dec., 2012
  • Global web revenue increased nine percent over 2011, and 50 percent since the launch of the online strategy three years ago. Investments in a digital ecosystem that is efficient to maintain and scalable across a wide variety of mobile devices enabled Carlson Rezidor to double mobile revenue in 2012
  • Partnered with industry leading social media companies Ignite and Revinate
  • Stay Night Automated Pricing (SNAP), Carlson Rezidor’s proprietary revenue optimization system, was rolled out globally in 2011. By the end of 2012, 87 percent of hotels worldwide were using the SNAP tool. Hotels using SNAP rate recommendations consistently see an average incremental RevPAR increase of two to four percent

Incoming Board Chair Diana Nelson and granddaughter of company founder Curtis Carlson, also reflected on the company’s progress during the past few years. “We are committed to investing in order to support continued growth, increased profitability and expanded innovation. We will grow our footprint with stronger brands and better revenue generation. But we must work as diligently, innovate as rapidly and work as hard as my father and his colleagues did in the first decade of this company,” said Nelson.
Credit
Glenn Haussman    Glenn Haussman
Editor in Chief
Hotel Interactive, Inc.

Bio: Glenn Haussman is Hotel Interactive's Editor In Chief, where he manages all editorial content for the hotel industry’s leading online information resource. Here he creates unique and in-depth content that stimulates and educates the publication’s ...
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