Carlson president and
CEO Hubert Joly, alongside Thorsten Kirschke, Carlson Hotels' executive vice
president and COO for the Americas, sat down with Business Travel News hotel editor Michael B. Baker in recent
weeks to discuss corporate and group travel outlook and plans for the company's
hotel brands, particularly Radisson, which is undergoing a major revitalization
project within the United States.
Business Travel News:
Where are we in the recovery now?
HubertJoly: This has been a much faster
recovery than expected. With corporate travel, we saw it pick up in Q4. CWT
bookings give us a good indication that bookings this year are up 10 percent
versus last year. Our customers are meeting with their folk and expanding.
Revenue per available room right now is quite uneven. Altogether, I think we're
in the right direction. Psychologically, it's much better. We're not in the
business of doing forecasts, but the recovery is here. Now, this is not going
to be the most vibrant cycle in the history of my time. There are a few clouds
on the horizon. The business group segment will pick up, as it's bound to do,
and the overall rate levels will increase.
BTN: Are you
seeing rate growth?
Joly: The rates
have started to stabilize to some degree. This week, the rates in New York are
crazy. As long as growth continues, we'll be fine.
BTN: By how much
is group driving this recovery?
ThorstenKirschke: Small and medium-sized
business meetings have come back, and clearly that has contributed to a lot of
the trends in business travel pickup. The big problem is the big meetings and
incentive market: that we have yet to see coming back. Some of the medium-sized
groups come with a short lead-time, which we have not seen before. We need to
be careful that we keep total pricing in mind when we quote for these groups.
It's total profitability and total pricing. Internal meetings of business
partners are driving a lot of that, but that alone is not going to contribute
to the sustained recovery.
BTN: What are
your development plans?
Joly: We expect
to open 90 hotels this year and sign about 100. We've already opened about 40.
We've opened 16 in the former Soviet Union this year, and 18 will be open this
year in Asia/Pacific. More than 60 percent of our portfolio is in North
America, but 70 percent of the pipeline is outside North America.
BTN: What are
your plans for the Radisson brand?
Kirschke: It has
a very strong profile in many parts of the world, but particularly in the U.S.
market, we need to do a little more homework. We have announced $1 billion to
$1.5 billion in investment, primarily in our North American and U.S. territory
for Radisson, which you know is the backbone of our hotel brands. Fifty percent
of all our partners in the U.S. have committed to improving their properties
and investing the required amount forward going in the next 12 to 24 months, so
very encouraging feedback on that front. Furthermore, we have invested happily
in the hotel in Chicago, the Blu Aqua hotel, the first of a series of flagship
properties in the key destinations. We want to be present with flagship
properties in five to 10 significant markets in the U.S. This is a $125 million
investment right in the center of Chicago, which will open in the fall of 2011,
about another 16 months to go.
BTN:
Internationally, are many of the Blu properties former Radisson SAS properties?
Joly: There was a
commitment that Rezidor would cease to use SAS as the brand name of Radisson,
so the team asked us for an efficient way to keep the blue box and replace the
SAS by Blu. In Asia and Latin America, most of our Radissons are upper upscale,
whereas in the U.S. it's more uneven. We decided to take Radisson Blu and the
upscale Green across the globe, and the way it's been developed, by
crystallizing, codifying and making the global standards for Radisson with a
tiered approach.
BTN: Will some
U.S. Radissons convert to the Blu brand?
Kirschke: In
every market, you can't spend this amount of dollars, but what this does is
prescribe the look and feel and tonality of the brand, the aspiration from a
physical presence and in combining the services with what Radisson is going to
be going forward. We realize we have to do some catching up. There are 420
Radissons globally and a small portion in the U.S. market that needs a little
help.
BTN: What's the
progress of rebranding internationally?
Joly: The piece
that needs to be worked is the Radisson Edwardian. The entire Rezidor portfolio
is rebranded. In Asia/Pacific, we've announced the first Blu opening in
September. Later this year, we'll reflag the vast majority of the existing
portfolio to Blu because they're already operating to the Blu standards, and
the same in Latin America.
BTN: How does
Park Inn fit your strategy?
Joly: In Europe,
the Middle East and Africa, Park Inn has been a very interesting success story.
They have 100 in operation and another 50 in development. It's still a
relatively new brand. In Europe, it was number one in 2009 in terms of guest
satisfaction for J.D. Power and Associates. When I saw that, I realized it has
the potential to be a global brand, particularly in the U.S. In the emerging
economies, the midscale segment still has to be developed.
BTN: How about
Country Inns & Suites?
Kirschke: Country
Inns and Suites has been a successful, homegrown North American story, and we're
very proud of it. We've announced the 500th Country Inn, and now the
opportunity is to go into new markets and create auxiliary markets, in Canada,
Mexico and India. At present, we're working around sharpening our marginal food
and beverage offering. In the long term, Country Inn will probably see a
remodeling overall that facilitates a global expansion and supports our global
growth strategies. It's such a prototype product today that has made its
success what it is, but is a lobby with a staircase and a fireplace necessarily
adaptable to India or China?
Joly: In this
space, brand work doesn't mean cookie-cutter. It means taking the brand essence
and making it relevant to that geography.
This story originally
appeared in the August 9, 2010, edition of Business Travel News.