Radisson to roll out aggressive expansion plans in Asia

By Bong Xin Ying

/ EdgeProp |

April 9, 2018 7:30 AM SGT

Fresh from a rebranding of Carlson Redizor Hotel Group to Radisson Hotel Group on March 5, Katerina Giannouka, Radisson’s president for Asia-Pacific, is ready to grow the group’s footprint in the region.

Giannouka: We will triple [the number of Radisson hotels in China] (Credit: Albert Chua/ The Edge Property)

Radisson is the world’s 11th-biggest hotel group, with eight hotel brands and more than 1,400 hotels worldwide. In Asia-Pacific, the group has a stable of 120 hotels under management. The intention is to have a portfolio of 20,000 hotel rooms in the region within the next five years, says Giannouka, who came on board last November.

The group has an aggressive rollout plan, with eight hotels to open in the region this year. Radisson Blu Bali Uluwatu opened in 1Q2018, to be followed by five others in 2Q2018: Radisson Blu Resort Phu Quoc in Vietnam; Radisson Medan in Indonesia; and Radisson Gwalior, as well as Radisson Chandigarh Zirakpur and Radisson Bengaluru City Centre in India. The fourth hotel in India, Radisson Red Chandigarh Mohali, is slated to open in 4Q2018, which will also see the opening of Radisson Suzhou in China.

Radisson Blu Plaza New Delhi in India, where the group has major brand recognition (Credit: Radisson Hotel Group)

New growth

Radisson has also signed on 10 new properties in the region, including Radisson Blu Resort Maldives; Radisson Mumbai Andheri MIDC in India; Park Inn by Radisson North EDSA, the Philippines; Radisson Zhengzhou in China; and three new properties in Malaysia — Radisson RED Kuala Lumpur City Centre and Kuala Lumpur Sentral, and Park Inn by Radisson De Centrum City in Kajang.

Most of the existing 120 hotels in Asia-Pacific are located in India, notes Giannouka. This is because India was the first market that the group entered in Asia 16 years ago.

The strong presence means that the group is signing on at least one new hotel every four weeks and opening one new hotel every six weeks, she adds.

In China, the group currently has 15 hotels operating in first-tier cities such as Beijing and Shanghai. “According to our growth plan, we will triple that,” says Giannouka. In addition to first-tier cities, the group is growing its footprint in second-tier cities and even third-tier ones such as Chongqing, Guizhou and Wuxi.

After all, Radisson is owned by China’s HNA Tourism Group. HNA purchased the Minneapolis-based Carlson Hotels in late 2016. The brands under Carlson Hotels include Radisson Hotels, Radisson Blu, Radisson RED, Park Plaza, Park Inn by Radisson, Country Inns & Suites by Carlson and the Quorvus Collection, which has been rebranded Radisson Collection. Carlson Hotels also owns a majority stake in Rezidor Hotels Group, headquartered in Brussels.

Radisson — HNA’s main focus

HNA has since restructured the hotel chain, including the change of Carlson Hotels to Radisson Hospitality last November. HNA undertook an aggressive shopping spree in 2016. Besides Carlson Hotels, it also acquired a US$6.5 billion stake in global hotel operator Hilton Worldwide, as well as inherited the latter’s 25% stake in Hilton Grand Vacations when the business was spun off in 2017.

In early March, HNA reportedly sold its 25% stake in Hilton Grand Vacations for about US$1.1 billion ($1.4 billion). HNA has been pressured to sell assets to ease its financial burden, even as Chinese authorities crack down on big overseas acquisitions by large companies.

HNA is also said to be looking to sell part, if not all, of its 25% stake in Park Hotels & Resorts, another Hilton spin-off, which owns more than 50 properties across the US, Europe and South America. HNA has yet to announce plans to sell its interest in Hilton Worldwide.

HNA also owns a 29.5% stake in Spain’s NH Hotel Group. The relationship between the two parties turned acrimonious when HNA’s representatives were ejected from NH’s board, following the former’s purchase of Carlson-Rezidor group in 2016, which had led to accusations of conflict of interest.

In January, HNA announced that it had hired JP Morgan and Benedetto, Gartland & Co to look for possible buyers of its 29.5% stake in NH, reportedly valued at €632 million ($1.02 billion).

With the divestments of the stakes in other hotel groups, HNA is therefore banking on Radisson for its growth in the hospitality sector. “The rationale for the restructuring within Radisson Hotel Group itself was to build on the strength of the Radisson brand and to signal the alignment of the two companies, Carlson and Rezidor,” says Giannouka.

Radisson Blu Resort Fiji Denarau Island is one of Radisson’s hotels in Asia-Pacific, where it intends to grow its footprint (Credit: Radisson Hotel Group)

China — growth market

It is no surprise that China is going to be a key market for the group. According to the 2017 China Outbound Tourism Travel Report, jointly released by Ctrip and China Tourism Academy, the number of Chinese outbound travellers reached 130 million in 2017, up 7% from 122 million in 2016, with tourist spending at an estimated US$115.29 billion.

China has become the largest source of inbound travellers for many Asian countries such as Thailand, Japan, South Korea, Vietnam, Cambodia and Indonesia. Other countries where the Chinese are in the top spot in terms of tourist arrivals are North Korea, Russia and South Africa.

Domestic travel within China itself is equally strong, notes Giannouka. “That’s why we are focusing on China.”

Likewise, the group plans to grow its footprint elsewhere in Asia, in markets such as Japan, Vietnam and Singapore, where it does not have a presence yet. “Our Asia-Pacific headquarters is here,” says Giannouka. “And we’re open to opportunities in Singapore.”

This article appeared in EdgeProp Pullout, Issue 825 (April 9, 2018).

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