There has been a fair amount of turnover in the c-suite at Radisson Hotel Group Americas and even recent rumors of a sale, but the current leadership believes one very important thing – Radisson as a brand has not been damaged. As important, the Radisson brand has never played in the urban, limited-service space – until now.
Radisson Hotel Group Americas leadership exclusively told HOTELS it is unveiling Radisson Inn & Suites, what it is calling a companion brand to Country Inn & Suites and initially a conversion brand in the upper midscale, limited-service segment. It is intended to offer owners flexible standards to drive profitability with hotels in airport locations, metropolitan areas and mixed development communities. With an expected ADR in the mid-US$70s, Radisson leadership places the likes Hampton Inn by Hilton, Holiday Inn Express, Fairfield Inn, La Quinta and Best Western Plus into its comp set.
“It is an opportunity to really leverage the Radisson brand awareness and position us against those ‘sea of sameness’ brands in more urban markets,” said Tom Buoy, interim CEO and chief commercial officer, Radisson Hotel Group Americas. “This brand will go grow the quickest with high-quality conversions. There have been a lot of 3-, 4-, 5-storey products coming out of our competitors that would make great conversions, especially among owners that are unhappy with the direction of those brands, or unhappy with the cost associated with them… It offers our franchisees another option to expand their presence into urban markets and allows us to expand our footprint considerably in markets where we didn’t have the opportunity with Country Inn & Suites.”
As the brand specs have just been finalized only “a couple” of deals are done, but Chief Development Officer Phil Hugh said there is already a lot of interest from new franchisees and some existing franchisees that want to convert to the new sister brand. The first property could be open by June and Hugh expect double-digit openings by the end of the year.
Radisson also expects to grow this product in the Caribbean in Latin America, as well as Canada, where a few deals are already signed, according to Hugh.
“Some of our owners in high barrier to entry, higher RevPAR markets have expressed interest that it is time for them to renovate, and they feel that putting Radisson first in their name will allow them to drive rate and pick up additional corporate clientele,” Hugh said. “We still sell a lot of Country Inn & Suites franchises and will continue to do so, but we believe it’ll be in more rural markets that are in the US$65 to US$70 RevPAR area, unlike where we believe Radisson Inn & Suites will drive into the US$80s and US$90s.”
Hugh added that Radisson will focus most on high-quality conversions and secondly look for top locations. “We have 500 Country Inn & Suites and growing this new brand to a similar size can easily be done because we’re not in those high RevPAR markets today,” he said.
New construction is being considered and, in fact, a franchisee in Florida who was going to build at Country Inn & Suites is seriously considering a Radisson Inn & Suites. Hugh added that another owner is considering as many as five new construction properties.
New construction pricing is still under development with Hugh saying conversions could range anywhere from US$3,000 to US$20,000 per key, depending on the condition of existing product.
Buoy added, “We believe it’s a great opportunity, not a second chance to make a first impression, but a second opportunity to leverage the experience that we’ve had and make a lasting impression on the segment and further expand our penetration of it.”
Listening to franchisees
Buoy and Hugh believe Radisson has created a differentiated product that purposefully gives owners an affordable option with a flexible operating platform and FF&E specs that endure.
The new brand is trying to cash-in on consumer trends surrounding all-day social hubs with quality coffee and what it is calling a Creative Content Studio featuring state-of-the-art monitors, gaming chairs, and a high-speed Internet connection for social media content creation or video game play. “There are 200 million people in the U.S. who are gamers and there is this enormous gaming culture that’s evolving,” Buoy explained. “We decided to embrace it… We just believe it’s an underserved segment.”
Interiors are inspired by the blue-green hues of evergreens and morning mist, and the deep purples and oranges of a setting sun. They are expressed through brand marketing, signage and wayfinding.
As part of its move to remove excess, Radisson will let owners set the tone but has already cut its free breakfast down to five core items (it can flex to 30) with a strong emphasis on coffee service its aroma that will infuse the lobby scene.
At the end of the day, Buoy said the Radisson will focus on three things: building better brands, building a better commercial engine, and building better systems with better solutions to drive overall system growth. “We believe that if we do the first three and do it well, the market will give us, or we will earn, the right to grow this portfolio.”