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The Rezidor Hotel Group: “Business as usual in our 400 hotels”

Born in Belgium, Eric De Neef has a degree in Hotel Management from CERIA in Brussels. He joined Rezidor in 2011 as Senior Vice President Park Inn by Radisson and was appointed Senior Vice President, Marketing, CRM & Global Branding in January 2013, and Executive Vice President & Chief Commercial Officer in June 2014. Prior to joining Rezidor, Eric served as the Managing Director for AccorHotels’ All Seasons, Mercure and MGallery Hotels brands in France.

What is the mindset within a business when a radical change in shareholders is underway? 

An initial stage of strategic review was undertaken by the Carlson group in the United States for its hotel division. We were kept out of it and naturally this caused some discomfort regarding the future of Rezidor, a 52% subsidiary of Carlson. This state of limbo was supported by speculations by the financial press regarding our future and groups that might be involved in an eventual takeover. And yet, throughout this period, until last March, the leitmotiv of management was clear: “business as usual”, we have 400 hotels to operate daily in 80 countries. And the Carlson family is perfectly capable of deciding to keep and even strengthen its hotel business. Once the official announcement was made about the takeover of Carlson Hotels by the Chinese group HNA, things got clearer, but with a new question: what does HNA plan to do with the subsidiary Rezidor? We must wait a few months to find out. Next fall, when the acquisition process will be approved by American authorities, HNA will have four weeks to inform the Swedish Stock exchange, where Rezidor is listed about their wishes. There are two possibilities: start an OPA on the 48% and take Rezidor private or sell a minimum of 22% of the capital in order to drop below the 30% rate. This is where we are. Our message to staff: let’s not lose time in speculations, hotels and guests are both waiting for us to be ranked on a level with them.

Generally speaking, have the different episodes of fusions-acquisitions in recent months played down the context, by showing that it is not exceptional? 

Marriot’s fusion-acquisition with Starwood Hotels was a veritable starting point for a new phase of consolidation in the hotel industry for which everyone had been waiting for a few years. We thought it would happen after the crisis in 2009, but it happened a little later. Operations between Accor and Fairmont-Raffles and still others are the concretization of a need for groups worldwide to be more powerful with respect to their interlocutors in distribution and technology. Size is important when it comes to offers, marketing and commercialization, but integrating cultures and teams will be a major challenge. Takeovers make sense on a financial level, but they still need to make operational sense.

Colorful room at the Radisson Red Brussels

The world is changing very quickly, particularly customer behavior when they are faced with new tools, new products, new offers; has the hotel industry reacted quickly enough to these changes?

Our reaction was a bit late, but fortunately not too late. It is true that for many years when there was an incident with a dissatisfied customer, we apologized without being fully committed to reconquering their loyalty. Of course we were concerned about the difference between the quality distributed in our hotels and the perceived quality, but when a guest left a property, two others were waiting for the room. We rested on our laurels and our location in cities. AirBnB’s arrival with its contact platform upset the classic hotel world, bringing it into doubt. We analyzed the reasons behind the success of this platform and we have many reasons to resume the dynamic of the regional integration, local familiarity, and social contact between clients and personnel. Park Inn and above all Radisson RED are our interpretation of this renewed control over our core vocation that is social and interactive. We are taking the same considerations at Radisson Blu in this interpersonal touch by providing connectivity between people.

Carlson Rezidor clearly played the differentiation card early enough, particularly in terms of the architectural and interior design of Radisson Blu properties; does more need to be done regarding customer experience? 

We have just presented a new room concept called BluPrint that insists on the brand’s identifying markers, but gives local architects freedom to interpret within the local context. The same is true for the policy of purchasing products from local suppliers. We are focused on this approach that preserves the brand’s sophistication and level of comfort together with the added value of local character.

Radisson Blu is a European initiative that has been diffused throughout the global network; is its deployment strong enough?

To this day there are only three Radisson Blu properties in the United States while there are 240 in Europe and the Middle East. At the same time, there are still only 30 Radisson Blu properties in Asia. This is part of the weakness that we need to make up for in terms of global flux between continents. The brand’s exposure is not sufficient at this point. As for Radisson in the US, the actions engaged by Carlson and the owners need to be assessed. Fifty or so properties have left the American chain over the last four years, and more than 600 million dollars have been invested in renovations of properties under the original brand Radisson Green. This explains growth in the RevPAR by 9% in 2014 and 2015. Now that this repositioning is complete, it is important to make it known worldwide to reaffirm our image.

Park Inn by Radisson Manchester City Centre

What was the initial feedback on the Radisson RED Brussels after a few months of operation? 

I won’t hide the fact that we opened the Radisson RED Brussels at the worst time, considering the dramatic circumstances that followed in the capital. Commercially we have not reached the level hoped for, but this is just a difficult phase. The most important thing for the brand in the long term is customer perception. After a few weeks our review score was 4.6/5 on TripAdvisor and the focus was on customer experience. What jumps out from very positive comments is interaction with personnel and the totally different approach to reception in a lobby that has nothing to do with a hotel lobby, but is more akin to an art gallery or game room.

How can this perception be sustained in the long term? 

It will require recruitment and a totally new way of working. It is fairly experimental for a group that has a traditional hotel culture. Recruiting takes place through the social networks and CVs from applicants had to be accompanied by a short video expressing the applicant’s personality. We are looking for polyvalent, somewhat extroverted collaborators. We have received over 600 videos and interviewed 130 applicants at our Casting Day in a big industrial loft where they were put in challenging situations such as having to interact with passers-by in the street. In the end, only 25 collaborators were hired in Brussels, a good share of which come from acting schools. They are supervised by three heads of staff who have an extensive hotel experience in order to teach the basics of the trade. Radisson RED is not a new concept based on the latest technology, but truly a differentiating customer experience. 

What are the brand’s ambitions?

Thirteen hotels have already been signed globally and the goal is for 60 openings by 2020. Many investors and current franchisees will meet at the Radisson RED in Brussels on June 30 so they may experience the concept live. We are hoping for many positive results, and especially to analyze the economic model with them. The strength of the concept also involved reducing the role of the back office to a minimum, drastically simplifying procedures, and making public spaces, such as meeting rooms, more flexible. 70% of spaces are dedicated to customers while 30% are for back office.

Does that it make the Park Inn by Radisson, the group’s other “fun” brand, look a bit old?

Park Inn is another one of our darlings and we will not neglect it to the benefit of the last born… the “new kid on the block”. Two years ago we entertained the same considerations to put the public areas to better use and to improve customer interaction around tables and provide full Wi-Fi access. Park Inn is our midscale brand while Radisson Red is positioned on Upscale select services. It is not the same segment and the brand truly has a card up its sleeve. We are training Park Inn by Radisson staff under a new motto: Happiness Guaranteed. The new marketing campaign is ready for the promise of a “Happy place to be,” for both staff and guests staying there. Everyone must smile. It is a new version of Rezidor’s “Yes, I can!” approach.

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