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As the parent company of global brands Radisson, Radisson Blu, Park Plaza, Park Inn, Country Inns and Suites and Hotel

Missoni, Carlson Rezidor is one of the largest hotel operator and developer groups in the world.

The result of exponential and relentless growth under the leadership of award winning CEO and president, Kurt Ritter, today the group has 1319 hotels in operation and under development. To cement the philosophy that drove such growth over previous decades, the group is now working towards Route 2015; the formalisation of its ambition to be the world’s number one hotel group to work for and invest with, underpinned by a 50% growth target to 2015.

Given the track record of a group that makes even the most demanding business decisions look effortless, it should be (another) walk in the park. But add to the equation a new brand,

a new market and a new president and CEO, and things become a little trickier.

2012 was a year of milestones for Carlson Rezidor. In July it was announced Doha’s Ramada Plaza had been snapped up by the group and would, within months, be transformed into a 5-star Radisson Blu, thanks to the ongoing $24m refurbishment of its West Wing.

The property officially re-launched with a lavish party attended by Carlson Rezidor’s senior management last month.

The acquisition took Radisson into its 12th Middle East country and was quickly followed by announcements of the development of two more properties in the city: One under Italian lifestyle brand Hotel Missoni and another under Regent Hotels and Resorts; for which Carlson Rezidor now holds the rights to operate and develop the chain’s properties across Europe, the Middle East and Africa.

INTO THEUNKNOWN

For global giant Carlson Rezidor, 2012 marked the start of a new era. From the departure of Rezidor’s long standing and much admired CEO to the group’s first steps into Qatar, Hospitality Business Middle

East catches up with AVP Mark Willis, Qatar GM Gordon MacKenzie and the outgoing boss himself, Kurt Ritter, to ask what will be next for the group that aspires to be nothing less than number one

The Doha property will be the first new Regent hotel under the Carlson Rezidor leadership and is currently under construction adjacent to the Radisson Blu. It will boast water theme unique to the local market at this time and will be followed by further openings in Russia, CIS countries, the Baltics, Middle East and Africa.

but most significantly, 2012 will be remembered as the year that the man behind this phenomenal growth stepped down from Rezidor.

The news was officially announced in September and quickly followed with the naming of Ritter’s successor, Wolfgang M Neumann, who began his new position at the start of this month.

With a conscientious eye on opportunity, Ritter’s attitude towards growth is not dissimilar to that of the average monopoly player. Referring to the intelligence behind Qatar’s positioning as a brand and the ongoing development of its sporting,

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educational and cultural prowess, Ritter says the country has become “too important on the world stage” for Carlson Rezidor not to have presence.

Newly appointed area vice president Mark Willis echoes: “We see the future here as very bright and it’s definitely something that we want to be part of, but we don’t want to come here with the wrong product or property. This is a special hotel with a lot of history and foundation and as soon as we had the opportunity to jump into this market, it was taken.”

Which brand? A founding principle of Ritter’s expansions has been to know the brands and, more specifically, which markets they are best suited to. For example, while Saudi Arabia

will benefit from four new mid-market signings, underpinned

by demand driven by the millions of religious tourists who descend on the kingdom annually, other markets require something more. “I definitely see a big demand

and not enough supply in the mid-market sector in Saudi

Arabia. If you look at the events in research and sport,

these do not demand

5-star properties. People

need good, clean, two or 3-star

Gordon MacKenzieStarting his career with the UK’s British Transport Hotels, Scottish born Gordon MacKenzie arrived in the Middle

East in 1976. “I began working in hotels because when you have a house on the monopoly board you get a little rent, when you have a hotel room you get a huge rent and I thought that was a good idea. I was either going to be a

Veterinary surgeon, or a lawyer or a hotel manager and it just so happened that hotel management won over. I came to the Middle East in 1976 and really haven’t looked back.”

places, just to sleep, and this has not been so well done in the Middle East,” he observes. Even when the mid-market has been attempted it hasn’t been pulled off with under-served, not to mention under-cleaned, properties giving the market a bad name, he adds.

“I’m not trying to be the Wiseman, but this is where the growth is.

“In the beginning it was more prestigious for a high worth individual to say they wanted to build a luxurious 5-star hotel. We would suggest a 3-star and they would say no. Then I would ask: do you want to make money or do you just want to build a palace for yourself?”

“We don’t have many, but we have a few Park Inns and they do very very well. So we want more of those.”

At the opposite end of the spectrum it was recently suggested a new tier, ‘deluxe’, would be introduced, yet confirmation and details on this are still not forthcoming and Willis comments: “There are always discussions of whether we look to grow in one segment or another. We have a strategic alliance with the Regent product for Qatar and Abu Dhabi, but let’s see where that takes us in the future.”

Project QatarAs with all the group’s major decisions, the move into Doha was steered by Ritter. Admitting it took “some time” to finalise the Ramada Doha acquisition, he pursued the deal due to the sentimental value he personally placed on the property, having first visited in 1981 during a themed ‘Scandinavian Week’.

“Why Doha? Because it has become a must on the list. We are now active

in 12 Middle East countries and we are at a size that we cannot say we’re not in Doha. It was a little nostalgic to come back but I said if that hotel is available it should be us operating it,” he recalls.

For Rezidor, Radisson Blu is the ideal brand for the growing Doha market at this time; offering something that nods at luxury but on a large enough scale to serve the transient – and lucrative – business market. Run under the leadership of GM Gordon MacKenzie for the last 33 years, the property is currently undergoing massive renovations at an ever increasing cost of $24m.

“Radisson Blu in the Middle East is 5-star but we don’t want to be in the same market as the Shangri-Las and Ritz Carltons of this world; we can’t do that with 583 rooms. Within Doha we were known with Ramada as a 3-star name, 4-star property and 5-star service. With Radisson we have a 5-star name with a 4-star property and a 5-star service,” MacKenzie shares, adding: “I’m not after star ratings, I’m after heads in beds. With 583 rooms that’s what you need.”

In the refurbishment, bathroom sizes will increase, a wet room will be added, bedrooms updated and a state of the art shower (described by MacKenzie as “a selling point in itself ”) will be installed in every room in the hotel’s West Wing.

The eighth re-opening of his career, it’s a process MacKenzie appears to have taken in his stride and when asked to name the challenges of the process he breezily responds: “It is very simple.”

The design and project appointment process took on a pick and mix approach, with MacKenzie describing

1319 HOTELS IN OPERATION AND UNDER DEVELOPMENT GLOBALLY

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his roll as hands-on throughout. Firstly, four contractors and designers were appointed to mock up show rooms. Paid $50,000 each for their trouble the best elements, as decided by Radisson and Rezidor management, were then taken from each mock and amalgamated to create the finalised design.

The renovation will be integral to retaining the hotel’s position in the local market, but Qatar is currently the only hotel market in the GCC where F&B revenues are higher than room revenues, meaning the challenge is far from over.

“We recognised years ago that if you don’t innovate you die. So we decided to innovate and saw the growth factor certainly was in F&B. From then we began adding new venues and ended up with the 22 we have today.”

It’s an area of operation that has buoyed the hotel during occupancy fluctuations, as the new properties take their “fair share” of the market.

That’s not the say there won’t be further developments. The constant evolution of the hotel’s F&B offerings

have seen a fine dining vegetarian restaurant replaced with tapas bar Picasso’s, and the introduction of French, Chinese and Japanese outlets; many of which have won awards.

There are also tentative plans to open more outlets beyond the hotel from April 2013.

Heading up all the hotel’s F&B, executive chef Jurgen Lepping reveals the USP is rooted in choice.

“People always want something new – if a new restaurant opens they go there. But for those who live here it’s about variety, so we always have something going on

For example, people know that every Wednesday we fly fresh fish in from Holland and they can go to Pier 12 for a fresh fish dinner – lobster, langoustine, etc,” Lepping shares. He will also be responsible for helping to launch the outlets at the new Regent Hotel, including the first authentic Thai restaurant in Doha.

MacKenzie adds: “We are established within the community, we serve the community and the community supports us.”

The focus now is clearly fixed on 2022, but that hasn’t made McKenzie complacent in his role leading to that point; there’s a strategy for everything. In terms of dealing with the inevitable periods of low occupancy between now and then, he asserts: “One thing we don’t do is cut our rates. We will never reduce our rates even in the height of summer. The market does not dictate that you are going to get another 100 people or 1000 people coming just because you have swiped 50 riyals off your offered rate. It just doesn’t happen.

“This is not Dubai where you include all the extras and throw in a hire car. That works there, but this is Qatar and it’s an entirely different market,” he adds.

If his predictions are to be believed, from 2014 such periods will no longer occur, as the long awaited boom finally hits.

Route 2015Group-wide, the broader focus is on the plan Route 2015. Launched in December 2011 it benchmarks target margin increases for every element of the business at 6 – 8%. Willis says year one was “positively on track”, and that 2013 looks even stronger, but innovation, as always, will drive the plan’s success.

“I think Rezidor has always been a company that has tried to reinvent itself within its markets and the Middle East is a very dynamic market. We have brought new products such as Missoni and Park Inn and have achieved active growth in such a variety of areas. We haven’t focussed on demand as many others have, but we have looked at different locations, such as Tripoli, Jeddah, the growth in religious tourism,” Willis explains.

“We have taken opportunity when it has come to us very quickly. We are quite visionary in looking at locations and we have such a great infrastructure of owners throughout the region,” he adds.

The driving force behind the quick negotiations and rapid rise to

“To get this asset into the portfolio is just won-derful. For us it’s important for us to be in Qatar, we have a Missoni hotel here by 2015 and Doha is one of those locations that has always had

A foot in the door

stability and growth in the hotel sector, all the big brands are here and it’s positive for Rezidor to come into this location,” Mark Willis, area vice president.

One thing we don’t do is cut our rates. We will never reduce our rates even in the height of summer. This is not Dubai where you include all the extras and throw in a hire car. That works there, but this is Qatar and it’s an en-tirely different market

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Kurt RitterDuring his time at the top, Ritter has signed a number of brands into the group portfolio, including: Radisson Hotels Worldwide in 1994, Carlson Hotels Worldwide in 2002, Missoni in 2005 and most recently, in 2012, Regent. The first Regent in Doha is currently under construction, when completed

it will mark a hattrick of properties for the Carlson Rezidor Group in the, still contained, market of the Qatari capital.

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international dominance has no doubt come from Ritter. A hands-on leader, he recalls how owners have been (positively) shocked by his willingness to be available to their needs and reveals that this accesibility has been a key element of his ability to negotiate “very quick decisions” and, hence, snap up properties at the rate Carlson Rezidor has.

“My strength was to talk to people. From starting with 16 hotels and growing to 450, I still was a very personable CEO and every hotel owner has my mobile number.”

“When others say they have to go back to a board, by the time they have stumbled ten times over their boards we have signed the deal. And it was so nice of our board to give us that freedom, but we had to earn it. Once they saw how well we did and how little the quota of failure was... of course nobody likes to make mistakes, but sometimes they do,” he muses.

While he admits there have been leased properties,

predominantly in Europe and the UK, that haven’t performed as projected, Ritter

recalls the words of a former mentor from Scandinavian Airways,

who told his employees that he wanted each of

them to make two bad decisions a day... and 98

good ones.

“But a waiter breaks a glass, a cashier sometimes won’t balance their till, accidents happen. As long as they are not too fatal; you know you cannot make them every day,” he adds.

Looking backCommunication has not only been a cornerstone of Ritter’s success in his role, but a vital highlight of his whole career.

Starting out at the Ritter family hotel in Interlaken, Switzerland, he stepped into a hands-on management role as a teenager, following the death of his father. Recalling the hotel had only one phone – itself requiring only a two digit number and connected via a central operator – he says the most surprising trend to emerge over his career has been the development of communication.

“If you look at the days of a single phone in the hotel then to having fax and internet, it has been a fantastic development. Again in that, I am very happy that we were the first company, at least in Europe, to start giving free wifi in-room. Now everybody is doing it.”

Describing the backlash he received from making such a move, he compares the concept of pay-per-hour internet as ludicrous as charging for bathroom facilities.

“At first the media said it was destroying the industry because wifi was a lucrative add on, but that little hotel in Switzerland also only had two bathrooms so guests would have to pay to use the bath. If you go to a hotel today and are charged €15 for taking a bath, you would argue the bath is part of the room. Well, today internet is part of the room. You cannot imagine it not being there, it would be easier to

have no bed.”As Carlson Rezidor continues on

its growth trajectory to 2015, and no doubt beyond, and Ritter moves into his new role as advisor to the CEO of Carlson, he will have many a successor. His legacy to them?

“I think 22 years as CEO is enough. I have put my stamp everywhere and it is definitely time that somebody new comes in and sees it with different eyes.

“I think I was a grower. A little bit of a dare devil. You have to have the guts to take on properties at speed while other companies are engaging their analytical departments to analyse from here to the moon. By the time they have made the decision, we have signed the deal. That is why we have become the fastest growing company. It’s not that we haven’t made a mistake – we do look back and wonder if it was a good or necessary idea to take that and sometimes you have to say no. But if you weight that with the speed I think that we didn’t break too many eggs along the way.”

6-8% INCREASE IN MARGINS ANNUALLY UNDER ROUTE 2015

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THE NEAR FUTURE IN THE MIDDLE EAST

Mark Willis“Saudi Arabia is a growth location for us. It has had another positive year in 2012 and that will continue in 2013. Religious tourism continues to grow and the Radisson Blu brand is very well recognised, so it is definitely a focus area for us,” says Willis. “What the future brings you never know and the region is one of opportunity. Out of the very difficult 24 months that Egypt has seen, as we go into 2013 we will see where that will take us. We would hope that the stability will promote some new growth and new infrastructure,” he adds.

Under the leadership of area vice president Mark Willis, six signings were made in 2012 for new properties across the region. Saudi Arabia has been placed firmly on the radar, with four of the new signings made for mid-market properties geared towards to the millions of religious tourists that descend on the Kingdom annually

KSA PIPELINE, SIGNED 20121 Park Inn Hotel & Residence Jeddah* 4-star 350 rooms Q1 20152 Radisson Blu Riyadh Ring Road* 5-star 252 rooms Q1 20163 Park Inn Residence Riyadh Al Sahafa* 4-star 17 rooms Q1 20164 Radisson Blu Residence Riyadh’s Diplomatic Quarter* 5-star 110 rooms Q1 2016

QATAR PIPELINE6 Hotel Missoni Doha* 5-star 300 rooms Q1 20157 Regent 5-star 365 rooms Q4 2013

EGYPT PIPELINE5 Sharm el Sheikh Lagoon 5-star 913 rooms Q4 2013

OMAN PIPELINE11 Radisson Blu Hotel & Resort Sohar 5-star 162 rooms Q4 201312 Missoni Sifah 5-star 250 rooms Q2 2014

UAE PIPELINE8 Radisson Blu Al Qurm Ras Al Khaimah 5-star 250 rooms Q2 20149 Park Inn Dubai Airport Free Zone 4-star 310 rooms Q2 2014

10 Park Inn Dubai Al Jadaf* 4-star 300 rooms Q1 2016

*2012 signings

1 23

4

5

6

7

8

9

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