By Colleen Isherwood, Editor
MIAMI BEACH, Fla. — Radisson Hotel Group is primed for success with its five year plan and the benefits that should come from its acquisition last year by Jin Jiang, the world's second largest hotel group.
The picture that emerged during the business sessions at the Radisson Americas Business Conference held today at the Fontainebleau Hotel in Miami Beach, was that of a company that has set goals for the next several years and is in the process of delivering on its promises.
The picture that emerged later today at the press conference was much broader in scope and timeline — talking in more detail about the changes RHG can anticipate since it was acquired by Jin Jiang late last year.
We said we’d do it, and we did
Last year was a year of dramatic changes at Radisson Hotel Group as they announced a new name, new strategic plan, new rewards program, new logos and branding, new leadership and more. There were lots of promises based around efficiency, technology, brand definition and guest experience.
This year, the most common statement among presenters was, “We said we’d do it and we did.”
One of the most dramatic moves was to remove the bottom 18 per cent of non-performing hotel rooms from the Radisson core brand — because a brand is only as good as its lowest performing property.
“From a strategic perspective, it's an easy decision. From a financial perspective, it's a very difficult decision. It's hard to lose revenue today because of the right long-term financial strategy,” said Ken Greene, president, Americas. “The decision comes down to, 'Do I want to keep somebody bad at the expense of somebody good.” Because good operators will leave if the brand is dragging them down.
“It was an extremely difficult decision financially, and because we do value all of our owners,” added John F. Kidd, CEO and COO, Radisson Hospitality Inc. “We approached our owners and asked them, 'can you get there, can we help you?' With 18 per cent, it wasn't going to work out. It's like pruning the rosebush so you know the next season it's going to bloom beautifully.”
Radisson launched or reworked number of tools for owners and operators to help them with everything from rates to sales leads — just as they promised last year. The Country Inn and Suites brand is way ahead of target in transitioning to the Gen 4 prototype. Radisson has a new room design that will cost owners just under $10,000 (U.S) per key. There's a new global sourcing program that will save owners 20 to 50 per cent on key items like pillows; an online SHOP (Secure Hotel Online Purchasing) program; and a one stop shop solution for interior design and FF&E with four companies.
And then there's RHG's unified technology solution, named EMMA (see inset) and the new website and app which RHG is onboarding in June.
“Our roadmap is clear and now we are accelerating,” said Kidd.
What the Jin Jiang acquisition means long term
Jin Jiang is the world's second largest hotel company, and is state-owned by China. With 12,000 properties and 1.3 million rooms, it is comparable in size to Marriott, which has 6,900 properties and about 1.3 million rooms.
More than half of the Jin Jiang Hotels are their own brands in China, but in addition to RHG, they also own Louvre, Plateno and Vienna Hotels Group, each of which has their own brands and strength in different parts of the world.
“We are confident Jin Jiang will elevate RHG to a new level of strength as a global leader,” said Kidd in the opening session. “Its loyalty program has 150 million members, and with a record number of Chinese tourists travelling abroad, it's a powerful company. The Jin Jiang owner shares our vision, and our deep roots in the hospitality industry.”
So what about opportunities for scale with a parent company that large? Will RHG, which has 22 million Radisson Rewards members, be able to benefit from the 150 million members of the Jin Jiang rewards program, for example?
“The partner companies have been having very intensive discussions since December — technology, branding, loyalty — many discussions,” said Kidd. “The loyalty side is a huge component of our business makeup. Loyalty is a science and very technical. Jin Jiang has gone a different route [with their loyalty program] — the question is how to marry our programs together in a very efficient way, so that members can get all the benefits of both programs and it becomes seamless.”
“One of the benefits is that Jin Jiang can unlock China for us,” added Eric De Neef, EVP and chief commercial officer for RHG. “It's a system compatibility exercise — and it's big. We are working on some technical things and the timeline is that we will be ready to begin by this summer. We will start by loading 50 RHG properties onto their system.”
“It's something that we want to introduce at the right scale,” added Efrem Berman, vice-president of global loyalty at RHG. “We want to make sure that the 150 million members do get benefits outside of China.”
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