A flurry of developments this year has enhanced the profile of Rezidor in the region, with a new Missoni hotel in Kuwait and the takeover of management of former JAL properties in the UAE. Kathi Everden looks at the current and future prospects for the group
Probably not the best known corporate name in the hospitality sector, The Rezidor Hotel Group in fact has a history dating back more than 60 years, since the launch of its first hotel – the SAS Royal Hotel Copenhagen, a property claimed as the world’s first designer hotel where founder of modern Danish design, Arne Jacobsen, put his stamp on everything from the architecture and furniture through to ashtrays and airport buses.
It was 30 years later that the group opened its first hotel outside of Scandinavia, choosing Kuwait as a location and putting in a dynamic general manager — Kurt Ritter — who just nine years later became president and CEO of SAS International Hotels, as it was then known.
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Established as an integral part of the Scandinavian airline, SAS, the hotel group had become an independent unit within the group and now began to expand to new territory, acquiring a 40% stake in InterContinental and in 1994, entering a partnership with Carlson Hospitality to create Radisson SAS.
In 2000, the group took a stake in Malmaison hotels, and two years later, agreed a master franchise with Carlson to develop and operate Country Inns, Park Inns and Regent Hotels in Europe, the Middle East and Africa — at the same time, terminating the deal with Malmaison and exiting InterContinental.
A master franchise with Cerruti marked the return of the company to designer territory, although this partnership was abandoned in favour of a license agreement with fashion brand Missoni to launch a new lifestyle brand, Hotel Missoni.
And, in 2005, Rezidor was launched as the new corporate name following an Initial Public Offering on the Stockholm Stock Exchange with Carlson eventually accruing a 42% stake as SAS exited the hospitality sector.
Recent milestones include the change of brand from Radisson SAS to Radisson Blu in 2009 (reflecting the move away from the airline antecedents); opening of the first Missoni in Edinburgh, the rebranding of Park Inn as Park Inn by Radisson and the sale of the Regent chain to Formosa.
This leaves Rezidor with four distinctive brands and more than 400 hotels in operation and under development in 62 countries – Radisson Blu Hotels & Resorts, Park Inn by Radisson, Country Inns & Suites and Hotel Missoni.
This limited palate of brands is now becoming an advantage, according to Middle East area vice president, Marko Hytönen, who says the group offers clear identities for each of those in its portfolio, with three major names in the midscale, upscale and the luxury lifestyle arenas.
“For some corporates, it can be confusing with all the various brands – can you really differentiate between them?” he says, while indicating that a gap for a premium name could be on the cards since the disposal of Regent.
“We wouldn’t necessarily look at replacing Regent, but there is perhaps potential for a luxury tier in the future — and meanwhile we are actively looking to grow the Missoni brand in key locations across the world, with the Middle East the perfect location for this.”
In fact, Rezidor is already tinkering with a new sub-brand by adding a ‘Royal’ designation to certain Radisson Blu hotels.
The former JAL hotel in Dubai, taken over by Rezidor in July, has been renamed as the Radisson Royal, and will act as a flagship in the region for the group, being one of only two Royal hotels across the network with the other located in Moscow.
“These hotels differ from the average Radisson Blu in terms of luxury, and tend to have a higher positioning, unique design and/or some sort of historical affiliation,” says Hytönen.
The takeover of the hotel, along with its sister property in Fujairah, strengthens Rezidor’s presence in the UAE where it operates nine hotels and resorts in four emirates — in total, the group manages 29 hotels through the GCC, Egypt, Jordan and Lebanon, including a currently problematical operation in Tripoli.
In the pipeline are 11 hotels in Ethiopia, Egypt, Saudi Arabia, the UAE and Oman, where the group will open its second Missoni in the region at Sifah next year, as well as a hotel in Sohar. A further 1500 rooms are under negotiation and will be announced later in the year.
All of which makes the Middle East of strategic importance to Rezidor’s move out of its stronghold in Europe, where it boasts the largest pipeline and is number one in Russia, the CIS and the Baltics, both in operations and future developments.
“Our pipeline in the Middle East and Africa is the second largest and we will continue to grow across the region — to put it simply, in the EMEA we have more than 300 hotels in 60 countries with a further 100 in development,” says Hytönen.
Of course, in line with other groups, Rezidor has been impacted by regional turmoil, with group half-year results showing a drop of 27.8% in RevPAR and occupancy down 23.1%. However, key markets such as Saudi Arabia and the UAE, with RevPAR up 15.8% and 10.7% respectively, have offset a fall of 54% in Egypt and 77.9% in Libya.
“The continued disruption in the Middle East will certainly affect the region,” says Hytönen. “Increased security concerns worldwide will have an impact on guest choices in 2012, as we have seen in 2011.
“However, the growth of the mid-market will affect business positively in the coming years, and the increase of tourists from India and China will be something the industry must adapt to quickly.”
Globally, he said the focus for growth would remain in emerging markets: “Park Inn has huge potential to grow rapidly as many cities can take one or several hotels, while Radisson Blu will continue to expand steadily and for Hotel Missoni, we will look at capital destinations.
“Obviously revenue generation will be on top of our agenda, and we will continue to strengthen our alignment with Carlson, optimising operational synergies, especially across the Americas and Asia Pacific.”
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