Aiming for more – Radisson Hotel Group profile

With more than 1,150 hotels in operation in around 114 countries, Radisson Hotel Group (RHG) is the 11th largest hotel company in the world. But that’s not enough for Eric De Neef, executive VP and global chief commercial officer, who says it can yet become “the top choice”.

De Neef and his colleagues in the senior management team are on a mission to improve the business’ reputation by focusing on classifying brand standards into “guest experiences pillars”, where “locality, easiness and memorable moments” are features of any visit. “We want to tackle the business differently and be known differently when compared with other hotel brands.”

The new scheme is being driven by the motto ‘every moment matters’, which he says will teach staff to deliver “memorable moments, everyday, everywhere, and at any time”. Everything the brand does will “fly under the flag of this motto”, and the group is training its staff to see every interaction they have with guests as “critical”. Other key planks of the five-year plan include revamping the marketing, sales and revenue management, portfolio management and IT systems. Thanks to a bond of £222m the group has just raised, there’s no doubt its possible.

De Neef joined Radisson Hospitality AB in February 2011 as senior VP for Parks Inn by Radisson, and has more than 30 years of hospitality experience in operations and strategic management. He is responsible for developing the global branding, marketing and revenue generation strategy for the business, focusing mainly on guest engagement and loyalty. He does this alongside colleagues Federico Gonzalez, John Kidd, Kevin Carl, Iñigo Capell and Knut Kleiven, who form the global steering committee. The committee’s job is to ensure RGH is “fully aligned on important matters”, such as “partnership and global growth”.

CHALLENGES

One of the challenges RHG faced when building its new five-year plan was creating a new “solo approach” between companies Radisson Hospitality and Radisson Hospitality AB, both of which are owned by Chinese firm HNA Tourism Group. The group’s current portfolio includes Radisson Blu, Radisson Collection, Radisson Red, Park Inn, Park Plaza, Country Inns & Suites and Prizeotel. But according to De Neef, only Collection, Blu and Red are slated to “go global”.

De Neef says the first phase of the plan consists of repositioning Blu into the luxury segment along with Radisson Collection, a tactic which he says will differ from country to country in order to “face each region’s strongest competitors”. In the case of Radisson Collection, key locations in which RHG wants to boost the brand need to be in “critical city fide markets”.

“What we also want to do with Collection is to branch out to some cities and some countries that we see potential in, that also might not necessarily well known and recognised.”

Specific difficulties in launching the group’s Radisson Red brand, which specifically targets the Millennial generation, are the resizing of rooms, achieving simplicity of design, and a focus on sharing economy, in order to appeal to its intended audience. De Neef also says the group had to change the logo and play with the slogan ‘Red is the new black’ when introducing the brand.

GLOBAL TACTICS

When devising tactics that will allow the company to “become one of the top three in the industry”, De Neef says it differs depending on specific markets. “What is clear is that the marketing engine and the marketing management in American business is different from the UK.” He says the biggest problem when addressing the American market, from a guest perspective, was the gap in its consistency. “All customers were comparing Radisson in the US and Radisson in the UK and said there was a gap in quality.”

He adds that RHG has already identified 14 cities in the North American and 21 cities in the Americas where upscaled Blu properties will be implemented. “We have an aggressive plan for the US and we are in process of doing that right.”

In the case of Saudi Arabia, De Neef acknowledges how the company sometimes relies upon OTAs, despite being the biggest operator in the territory. “We have 25 hotels in Saudi Arabia, but our website is not translated until the reservation is complete, meaning our performance was weaker. After doing some analysis what we found was that 90% of the searches in Saudi were in Arabic, meaining only 10% of search were covered in English, so in this case we needed to engage with the OTAs.”

GOING FORWARD IN THE INDUSTRY

De Neef says that although RHG has been “successful in fighting back against its competitors”, issues such as the rise of Airbnb, the dominance of OTAs and even “changing behaviors in customers” may threaten the company’s dizzying goals. London was recently found to be the leading market for overnight Airbnb stays in a study conducted by global real estate advisor Colliers International and hotelschool The Hague, with 6,703,337 overnight stays – 45% growth compared with 2017.

Some cities including Amsterdam, Berlin, Madrid and Paris have even introduced legislation to restrict Airbnb’s use, and legal actions on behalf of Bristol’s hospitality sector have been proposed against Airbnb. Despite this, De Neef says it is important to understand the success drivers behind “the alternatives”.

“What we have done is to learn why Airbnb was successful and what we could learn from it and to then deploy those practices ourselves. But we don’t want to become another Airbnb because we have a total different value proposition.” When addressing how RHG is handling the issue of the OTAs dominating the market, De Neef says: “It’s a matter of negotiating with them. They can bring us additional demand that we are not able to capture with our system – it’s a balance where you need to use it when you really need it.”

Neff also shared his thoughts on the changes in consumer behavior with the advent of Artificial Intelligence (AI) by saying RHG is a people’s business and it will remain a people’s business. “The contact with customers will remain and we will use technology for administrative tasks. RHG is a people’s business and that’s the beauty of it.”