Turning around as storied a hotel brand as Radisson will take time and money, but trying to do it using a different or related brand like Blu is a smarter way of doing it.
The Radisson hotel chain, once the flagship of the Carlson hospitality footprint, is in the midst of a massive refurbishing, remodeling and rebranding effort.
It can’t come soon enough.
Radisson ranked dead last in guest satisfaction among its North American upscale hotel peers in a recent survey by consumer satisfaction giant J.D. Power and Associates. That’s 11th out of 11 chains surveyed by the organization.
The survey is the elephant in the room for Radisson’s parent, the Carlson Rezidor Hotel Group, as the $1 billion-plus Radisson upgrading approaches the halfway point of its planned schedule.
“It takes time for perception to catch up with the changes,” Chief Branding Officer Gordon McKinnon said in a recent interview. “We are concentrating on guest-facing areas — the lobby, the restaurants, the rooms, the meeting rooms.”
Hotel industry analysts applaud the Radisson approach but caution that the chain faces stiff competition in its segment from the likes of Hilton Garden Inn, SpringHill Suites and Hyatt Place.
“It will be good for them. It will make them more relevant, modern and hip,” said Kirby Payne, president of HVS Hotel Management. “Demand is growing fast for the upscale market as people start to spend faster and companies feel better about the economy and start putting their people in little-better hotels.”
Jessica McGregor, a senior manager of travel and hospitality practices at J.D. Power, said hotel brands suffer when they go through a renovation because of customer inconveniences.
“It took Holiday Inn three to five years,” McGregor said of that chain’s refurbishing. “This is not something that comes back quickly. It takes time before you see a payout.”
Early guest survey results for 2012 indicate that satisfaction is improving for Radisson, McGregor said.
The Radisson makeover is a more than $1 billion undertaking, with about two-thirds of that money coming from the pockets of Radisson franchisees. The Carlson contribution is more than $350 million.
Meanwhile, underperforming hotels or hotel owners who did not want to make the investment are being culled from the system. Radisson no longer has a coveted Manhattan presence, for example.
Radisson reduced the room count by 20 percent in each of the past two years in hotels “that became a liability to the brand,” said Thorsten Kirschke, president of the Americas division of Carlson Rezidor.
One of the revitalized properties is in Kalamazoo, Mich., where the owner, Greenleaf Hospitality Group, spent $16.5 million to completely revamp its 340-room Radisson Plaza Hotel & Suites.
“We put in new wall vinyl, new carpet, new furniture. We expanded the concierge lounge. We improved the flat-screen TVs and the wireless access. We spent $2 million on a new ballroom,” said Tim Rayman, director of hotels for the group. “We’re really impressed with the Carlson plan. We’ve already seen an improvement in rates, and our customer service scores are up.”
There currently are 145 Radisson hotels, mainly in North America. Another 26 are under construction or conversion from existing properties globally.
Radisson isn’t alone in reacting to public demand. Country Inns & Suites by Carlson, another member of the Carlson Rezidor Hotel Group, recently upgraded its breakfast offerings and its dining ware as a service amenity.
But the ace in the Carlson Rezidor plan to drive more traffic to Radisson destinations may be its new premium concept, known as Radisson Blu.
The first Radisson Blu in North America has become a hit in the Chicago hospitality landscape with its distinctive wavy exterior design and its high-end dining and lounging areas. The only other finished Radisson Blu sits on the Caribbean island of St. Martin.
The third Radisson Blu is scheduled to open in Bloomington next March. Among its attractions: It will be the only hotel connected by skyway to the Mall of America. The $137 million, 500-room facility is already booked for corporate events and wedding receptions.
The downtown Minneapolis Radisson, where the late Curt Carlson’s hotel experiment began in 1962, will be converted to a Radison Blu next year with a project budget of $30 million.
“Blu cannot be without Minneapolis,” Kirschke said of the location that once featured the finest in Minneapolis dining and its own restaurant orchestra known as the Golden Strings. “It will become a flagship. We need good representation in the heart of the city.”
Carlson Rezidor executives would like to see the Blu concept in New York City and major U.S. metropolitan areas, including Washington, Boston, Miami, Los Angeles, Las Vegas and Atlanta. Major Canadian cities and markets in Central and Latin America also are on the wish list.
Not only do those big-city locations enhance Radisson Blu’s visibility, they also are markets where the hotel can charge high room rates and still be ompetitive.
“It would be out of balance for us to put a Radisson Blu in Tulsa where rates are 40 percent less than Manhattan,” said Kirschke.
The rebranding task may not be as daunting as it sounds. The Blu presence is already well established in Europe and the Asia Pacific market with more than 270 properties, most of those through conversions of existing hotels into the Blu concept.
The Carlson Rezidor Hotel Group is a spinoff of the original Radisson SAS partnership that included a host of upper upscale properties in Europe. When SAS, best known for its airline operations, decided to get out of the hotel business, it created Rezidor as a public company and Carlson eventually became majority owner. The new name became official earlier this year.
A key element of the Carlson Rezidor strategy to gin up business at the Radisson chain as well as its other hotel brands, including Country Inns & Suites, is use of a loyalty program called Club Carlson. Membership is at more than 9 million, up from 5 million three years ago.
“A year from now we hope to have a stronger foothold in Canada and Central and Latin America. We hope we have a healthier brand profile and market share,” said Kirschke. “This takes longer than just two weeks and flipping a switch.”
David Phelps –612-673-7269 ___
(c)2012 the Star Tribune (Minneapolis)
Visit the Star Tribune (Minneapolis) at www.startribune.com
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