Carlson aims to grow its portfolio by 50% within five years.
If some Radisson hotels seem rather blue these days, that's by design, courtesy of Carlson. In the words of Carlson CEO Hubert Joly, it's easy to announce ambitious plans for growth. It's an altogether different thing to execute the plans.
The company's five-year strategy, revealed in the report Ambition 2015, outlined plans for Carlson to become a “vibrant, innovative hotel company” and the leader in attracting hotel investment capital. The most daunting aspect of the plan was the relaunch of the flagship Radisson brand in North America, where it has lagged behind its European counterpart's success.
Carlson's goal was to pump up to $1.5 billion into the brand over five years and introduce the upscale Radisson Blu concept here. Carlson aims to grow its portfolio of approximately 1,500 properties by 50% within the five years.
The company is far along on implementing its plan, says Thorsten Kirschke, global chief operating officer for Carlson Hotels. “This is the first time for Carlson in many years we've seen a strategy like this in action, and we are executing it against its objectives and putting money on the table.”
By December, Carlson had earmarked $480 million to develop Radisson Blu properties in Chicago, Minneapolis and other U.S. cities. Part of the money has been used for renovations at company-owned Radissons, as well as technology.
Of the projected $1.5 billion investment in Radisson, $650 million was expected to come from Carlson and its franchisees for renovations. Half of the 125 Radisson properties in North America will be converted or under renovation by early 2012.
Some owners have balked at that plan, and Carlson has cut ties with others. Kirschke says 12% of the portfolio was dropped in 2010, and he expects about the same number to be terminated this year. “You have to walk the talk and weed out rotten apples,” he says.
The first new Radisson prototype is expected to open next month in Menomonee Falls, Wis., where a longtime Country Inn & Suites owner is converting an abandoned and gutted building into the new-look brand.
In addition to the three Radisson Blu flagship locations Carlson is developing, Kirschke says one or twocorporate-owned properties could be converted into Blus. By 2013, Carlson would have about six Blu properties open. “That will then contribute to the desired halo effect,” Kirschke says.
Carlson has been busy recently. In May, the company became the majority shareholder in The Rezidor Hotel Group, its long-time European partner. In June, Carlson and Rezidor sold Regent, their luxury hotel business, to Formosa International Hotels Corp.
Overall, Carlson opened 63 properties through November 2010. Of those, 42 signings were for Radisson.
“It's a fantastic year behind us,” says Kirschke. “We have a proposal on the table that is not just about size, but about profile, character and quality, and about the true sense of hospitality and the operations of hotels.”