Carlson Rezidor sees Blu skies ahead for luxury, Country brands
The second Radisson Blu in the United States and more on the way, plus a re-do to freshen Country Inns & Suites, has operators predicting good times. “We’re getting a lot more buzz,” says a Carlson Rezidor exec.
Buoyed by a solid rebound in the hotel sec-tor, the Carlson Rezidor Hotel Group is pushing forward with major initiatives it hopes will fuel significant growth in the coming years.
The Radisson Blu brand strives to reach a 4.5 diamond rating, up a notch from most Radisson hotels in the United States. This Blu hotel in Minnesota is its second to open domestically.
Carlson Rezidor has been candid in its goals. The strategy is to grow its hotel portfolio by nearly 30 percent to reach 1,500 hotels in operation and under development by 2015. As of December 2012, the firm was operating 1,077 hotels in 100 countries and territories around the world.
Two new initiatives that play a key role in that strategy involve the Radisson Blu and the Country Inns & Suites brands. Carlson Rezidor is in the early stages of launching the company’s premium luxury brand, Radisson Blu, in the United States. The firm also is introducing a fresh new prototype to fuel growth in its Country Inns & Suites brand.
“We are excited about all of our brands and we are excited about the market,” says Robert Kleinschmidt, executive vice president, chief financial officer and chief development officer of Carlson Rezidor Hotel Group for the Americas in Minnetonka, Minnesota. “It creates opportunity for all of us.”
Radisson Blu is already a formidable brand in Europe and Asia. The hotels were rebranded from the Radisson SAS name in 2009 after an ownership change. The company has 272 Radisson Blu hotels in operation worldwide with another 86 in various stages of development in countries such as India, Tunisia and Russia.
Yet Carlson Rezidor is just beginning to accelerate growth for its Radisson Blu brand in the U.S. The first Radisson Blu opened in late 2011 in Chicago followed by a second hotel that opened in March adjacent to the Mall of America in Bloomington, Minnesota. Two additional projects are underway with conversions in downtown Minneapolis and downtown Philadelphia. “Now with Chicago open and Mall of America open we’re getting a lot more buzz,” says Kleinschmidt.
The company is in discussions with potential owners and investment groups to open Radisson Blu hotels in major metros such as New York, Dallas and Miami. Although Radisson is primarily a franchise model in the U.S., Carlson Rezidor plans to maintain management of its new Radisson Blu hotels in the U.S. at least for the short-term in order to maintain quality control.
The Carlson Rezidor already has a strong base of upscale full-service hotels with its Radisson brand. Radisson Blu brings that luxury up a notch. Most Radisson hotels in the U.S. are recognized as a 3 to 4 diamond rating, while the Blu hotels generally aspire to reach a 4.5 diamond rating.
That upscale niche has been an attractive target for hotel companies in recent years. The luxury brands did fare better than other types of hotels during the recession, notes Stephen Sherf, president of the Hospitality Consulting Group, a hotel advisory firm in Excelsior, Minnesota. The other driving force is hotel development costs have become incredibly expensive. So, if anyone wanted to build a new hotel, it almost had to be a luxury property that could achieve a very high room rate, he adds.
Luxury hotels in the U.S. reported average occupancies of 74.3 percent in February, a 4.2 percent year-over-year increase. During the same period, the average daily rate increased 5.1 percent to reach $287.12, according to data from STR Global, a research firm in Hendersonville, Tennessee. In comparison, full-service hotels reported February occupancies rose 2.5 percent to 61.5 percent, while average daily rates increased 4.2 percent to reach $137.79.
Prototype aims at young
Carlson Rezidor also has revealed a new prototype for its Country Inns & Suites brand. Country Inns & Suites has 514 hotels either in operation or under development, the majority of which are based in the U.S. The new “Generation 4” design features a more contemporary look.
A dramatic wall feature in the newest Radisson Blu hotel, adjacent to the Mall of America, plays up its namesake color.
While the brand has seen consistent upgrades and renovations, this is the first time in its 25-year history it has been completely redesigned to include a new architecture and interior aesthetic, as well as a more modern logo. The updated hotel architecture and interiors will combine the iconic design elements that Country Inns & Suites is known for, such as its lobby fireplaces, with a more contemporary aesthetic. “The Country Inns still works very well with the 55 and older crowd, but they needed a new prototype that appeals to the younger traveler,” says Sherf.
The challenge has been incorporating a more modern design that fits with the brand image built around its country-themed décor and homey touches such as a fireplace and wood floors in the lobby. Originally, the fear was the company “was going to move the brand from where it is today to something completely different, and they didn’t do that,” says Vinay Patel, president and CEO of Fairbrook Hotels in Chantilly, Virginia. “They have freshened up the design without losing its signature elements.”
Patel owns 10 hotels including three Country Inns & Suites in Northern Virginia, Washington, D.C. and Baltimore. “We love the new product. It was long overdue,” says Patel. Although Fairbrook renovated two of its Country Inns hotels last year, the franchisee plans to incorporate some of the changes, such as the new branded signage and other collateral materials.
“Just talking to people over the last few weeks, people are taking a look at the brand again whereas before they felt that the brand was kind of old, tired and falling behind the pack,” says Patel.
The re-do appears to be sparking new interest from people who are looking at this brand as an option for new development, he adds.