CEO INTERVIEW: Rezidor's Wolfgang M. Neumann
As incoming CEO of Brussels-based Rezidor, Wolfgang M. Neumann discusses his plans to drive revenue, develop the mid-market and meet Middle Eastern owners, as he prepares to fill the shoes of legendary hotelier Kurt Ritter
What do you do when the hotel CEO you most respect and admire calls and invites you to join his company, as his ‘number two’ no less? Why, you accept, of course. But then how would you feel, 18 months on, when that CEO retires, leaving you to continue his legacy?
This is the remarkable turn of events that has befallen Wolfgang Neumann, executive vice president and chief operating officer of The Rezidor Hotel Group, set to succeed long-serving industry icon Kurt Ritter as president and CEO of the Brussels-based hotel chain on January 1, 2013.
Neumann joined Rezidor in May 2011, following a 24-year career with Hilton Worldwide and then a stint as CEO of Arabella Hospitality Group in Germany. He says the decision to move to Rezidor was an easy one, based on his long-held esteem for Ritter, who has run the company since 1989.
“I always admired Rezidor from the outside. I admired the culture, the pace at which they had grown and I always had a big respect for Kurt, so that was the reason why I joined Rezidor 18 months ago,” explains Neumann. “He’s an icon of the hotel industry as far as I’m concerned, he’s one of the legendary CEOs, so to work with him was one attraction.”
In addition, Neumann says he was keen to join a publicly limited company, with Rezidor trading on the Stockholm Stock Exchange since 2006, and to capitalise on his international experience gained with Hilton via Rezidor’s partnership with US-based Carlson.
“Rezidor is dynamic, it’s fast-moving, it’s entrepreneurial, we have had enormous growth success over the years; we want to build on that, consolidate that and we are now as Carlson Rezidor one of the top 10 international hotel companies,” Neumann asserts.
The first steps
There’s no doubt that Neumann has walked into a strong position; Rezidor has 436 hotels globally and 101 in the pipeline, and in total, Carlson Rezidor operates 1300 hotels. In the Middle East and Africa, there are 30 hotels operating under the Radisson Blu, Park Inn by Radisson and Missoni brands, and another 14 hotels signed.
But the company has set ambitious commercial and revenue targets in the form of Route 2015, and delivering these is now Neumann’s responsibility. Launched in December 2011, through Route 2015 Rezidor aims to increase its EBITDA margin by 6-8% by the year 2015.
The strategy puts a strong focus on revenue generation including global strategic partnership activities with Carlson, cost-saving initiatives, accelerated asset management programmes and further growth of the fee-based hotel portfolio — with a focus on new and emerging markets such as Russia/CIS and Africa.
Neumann says he has been heading up the strategy over the past 12 months and that now, with Ritter, they are working through a carefully planned transition period.
Come January, Ritter will assist Neumann as an advisor for three months, and afterwards continue to serve as a key strategic advisor to Trudy Rautio, chairman of Rezidor’s Board of Directors and president and CEO of Carlson.
“This was a meticulously thought-through planned handover and as I said, I have already been very much in the driving seat of the strategy over the last year, so this is continuation, ” says Neumann.
“Kurt and I worked so closely over the last six months in preparing this so we will continue on this strategy for 2015. Any new CEO will always bring in certain touches and certain refinements, it’s logical, but in essence Rezidor is a success story and we’re going to build on that and consolidate that,” he says.
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Keeping up with Carlson
The tie-up with Carlson is of particular importance in achieving these commercial goals, explains, Neumann, because of the international reach.
“Commercial drive is a key, key, key pillar and that will be in partnership with Carlson because we can approach this in a global way when it comes to globalising sales offices, approaching customers on a global basis, building competitive web platforms and distribution engines [and] launching a globally effective loyalty programme,” he says, explaining the benefits of the alliance, which was formalised in December 2011.
“I think this partnership has strengthened enormously [over 2012]. I come from an international branding background, I come from the Hilton experience, an American company, and that’s what Carlson brings to the partnership, so for me it was relatively easy to focus on the key opportunities and work with the colleagues in America in exploiting the [synergies],” Neumann says.
For the hundreds of GMs Neumann oversees, the benefits of this drive relate to capturing market share.
“That’s what it’s all about; we want to gain share from the competition, so a general manager will definitely feel the commercial drives today with all the systems and tools that we are making available.
“We have launched a new revenue management system in conjunction with Carlson called Snap; it’s the most advanced revenue management system in the hotel industry. Why is it the most advanced? Because we were lagging behind a little bit with ours but the benefit of doing it a little bit later is that we are really up to speed with the very latest technology and opportunities to optimise our revenue at the hotel level and at the area level.”
Neumann adds that GMs will also benefit from Rezidor’s “continuous drive to shift towards online to get away from the dependencies on online travel agencies”.
“This is a big drive; improving constantly [our own website] and ensuring that we own the customer relationship, the guest interaction at every touch point,” he says.
However, Neumann is keen to put the overall responsibility for the guest experience back onto the GMs: “We can all try to develop distribution and channels and internet but at the end of the day the most important touch point for the guest is the experience itself in the hotel.
We’ve got to focus on making sure that we live up to any expectations of the guest but to me most importantly, that we give the personal service to our guests —that’s what Rezidor’s “yes I can,” philosophy is all about.”
This is also the premise behind a current project to redefine the Park Inn by Radisson mid-market brand. Again working with Carlson, Neumann is planning to relaunch the brand in order to better meet the needs of generations X and Y, a group he believes is seeking “individualisation, flexibility and connectivity”.
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Middle East growth
Commercial and branding exercises aside, what are Neumann’s plans to develop the portfolio in the Middle East, an area dear to predecessor Ritter’s heart following an early tenure as GM of the SAS Kuwait hotel in 1979?
“It’s very much focused on UAE and Saudi Arabia, those are the two main countries,” he says. We have 10 hotels in UAE and six in Saudi Arabia. We just extended an agreement for five of the six Saudi hotels.”
Neumann still sees “enormous potential” in the UAE, but is cautious with regards to growth in Abu Dhabi.
“I think we are all getting to the point where we are concerned about Abu Dhabi; one has to ask himself [when] the saturation point in terms of additional hotels [is] reached? I think Abu Dhabi’s not far from that.
The government in Abu Dhabi has a responsibility to now really do what they said, to boost demand, to be more active, to deliver the Louvre and Guggenheim and all that because all these additional hotels in Abu Dhabi, they need to be filled.”
Following in Ritter’s footsteps, Neumann says he is already making plans to come and see Rezidor’s Middle Eastern hotel owners “in the next couple of months”.
“It’s critical, we cannot run this company from Brussels, we need to be out there, as I frequently say, whoever hits the road at hotel level, that’s where the music plays and it’s all about the hotels, it’s all about our guests and our owners and we need to be engaged so that our team members are inspired and motivated to deliver that service and so that our general managers feel supported with guests and owners,” he asserts.
This reflects his approach to a number of Rezidor’s initiatives, including the new Think Planet campaign, which targets an energy consumption reduction of 25% by 2016 in all EMEA hotels.
“It challenges all our team members to think about how they can contribute to this journey,” says Neumann. “It’s good for the bottom line, it’s good for the soul and the heart.”
Like Ritter before him, Neumann is clearly keen to lead a dynamic, involved and entrepreneurial team.
As he says: “It’s a fun business, it’s a fantastic business, we have a great company, yes it might be a bit challenging at the moment in terms of uncertainties in external environments, but when the going gets tough, the tough get going, that’s what it is.”
Career Highlights
1982: Graduated from the Institute for Hotel & Tourism Management Klessheim
1989: First job as assistant director of management development, Hilton Corporate Headquarters
1992: Executive assistant manager, Hilton Brussels
1996: First GM position, Hilton Paris
2003: Became president Hilton UK & Ireland, and 2005 president, Hilton Europe & Africa
2009: Chief executive officer for Arabella Hospitality Group
2011: Joined Rezidor as the executive vice president and chief operating officer January 1, 2013: Becomes president and CEO for The Rezidor Hotel Group, replacing Kurt Ritter, who has held the position since 1989.