Carlson early last year embarked on a multiyear growth plan for its hotel brands. One of its goals was to improve quality consistency
across the upscale Radisson portfolio, an effort that included the launch of
the upper upscale Radisson Blu brand and heavy investment into existing
Radisson properties. With deals for the initial Radisson Blu properties signed
in Chicago and the Minneapolis area, Carlson Hotels COO Thorsten Kirschke told BTN's Michael B. Baker that the company
is poised to make 2011 a year of "execution and transformation."
BTN: What
progress have you made on the plans you outlined early last year?
Thorsten Kirschke:
2010 was a hell of a year. We've come through articulating our brand profiles
and positioning a lot clearer, with the introduction of Blu to the landscape.
Toward the end of the year, we reached 75 percent of our [Radisson] ownership
committed to property improvement plans. We've deployed quite a bit of money. From
the announced $1 billion to $1.5 billion, we have spent or otherwise committed
half a billion already, so we're getting ahead of ourselves. That's very well
underway. The improvements on the revenue-generation front have been
tremendous: the new brand dot-coms, starting with Carlson and the product
brands. We have entered into the mobile applications scene without cheap copy/pasting
or screen scraping. We're launching our new loyalty program, a complete new
identity and formula with a wide range of globally respected partner brands,
and as such, it will be the fastest-redeeming loyalty program on the planet. We've
made great headways within the arena of travel management companies, where we
signed the preferred agreement with Carlson Wagonlit Travel. We hired an
enormous amount of globally oriented and experienced management into the
executive team. Food and beverage was something we had abandoned for the last
two decades, and now we have a vice president of food and beverage. We have a
new head of the technical department. We are opening a new office in Mexico and
have appointed an area vice president of Latin America, who has just taken
office in the last couple of weeks.
BTN: Are you
seeing business and group travel rebound?
Kirschke: We know
that Carlson Wagonlit Travel reports very healthy growth numbers in the
business transient arena, which we see confirmed by everyone else. The trend is
clear, but it's also fragmented in the sense that there are geographies and markets
that obviously are economic drivers in North America, and then there are
markets that have been less affected in the outset of the crisis and see a little
less rebound. We see the pickup is coming. The volume is there. We don't see
the same continuity in the rate development yet. I believe in a slow and cautious
recovery, versus double dipping. With group, they all seem to see good pickup
again, and that's very encouraging. It's very irritating to know that lead time
is getting shorter and shorter, and that's regardless of recession or recovery.
BTN: What's been
your sales strategy?
Kirschke: We have
strengthened our national sales teams in the U.S. by numbers, getting feet in
the street and being out there with the customers. This county is too big to
have everybody sit in one spot. We are regionalizing more and adding more
resources, but we also are looking at exploring transatlantic
and transpacific travelers who come to us. We have now developed a global
network of regional sales offices to make sure we get the share of
intercontinental business. That's in its infancy, but it's a start, and we've
seen early successes with our global sales office out of New York, which has
produced tremendous numbers into Europe. That opened in December 2009.
BTN: How do your
midprice brands fit into your plan?
Kirschke: Country
Inns and Suites has seen difficult times in 2010, with credit being tight and
money not available. With Country being a brand that is predominantly new
construction, it's been a tough year. However, it's been the year where Country
had its first-ever conversions. We had 12 very successful conversions, which is
a great achievement because we know we can do a lot more with that brand here
in North America. On a global scale, Country will play a whole different role,
together with Park Inn. More affluent demographic changes in the population
will increase demand for midscale accommodation, so we're revamping Country on
a global scale to be more adaptable in countries like India, Mexico and Russia,
and other places where maybe the staircase and fireplace in the lobby is not so
relevant.
BTN: With the sale of the Regent brand competed last year, do you envision Carlson competing in
the luxury space again anytime in the near future?
Kirschke: We
haven't excluded that forever, and we know that we have other opportunities
along the brand scale, be they luxury or the boutique—where we may look at [European
partner Rezidor's lifestyle brand] Missoni to take a more global role going
forward—or if it's in the economy arena. Another intriguing model we're
analyzing is extended stay. If you look at the next 12 to 18 months, we have
our hands full not just in getting commitment but driving execution, and you
can only have so many balls in the air.