Takeover spurs on China expansion
Updated: 2016-12-12 07:40
By Sophie He(HK Edition)
Betting big on a partnership with a Chinese conglomerate, global hotels giant Carlson reveals plans to ramp up efforts to expand into China, its CEO David Berg tells Sophie He.
The takeover of its hotel group by a Chinese mainland conglomerate earlier this year has given Carlson Hospitality Group's expansion into China - especially gateway cities to meet rising demand - a much-needed boost, says Chief Executive Officer David Berg.
The company's Carlson Hotels Inc currently has about 1,400 hotels across 120 countries and regions worldwide, which includes the Radisson brand, Berg told China Daily.
Carlson has been in the hotels business for about 50 years, including operating in the Asia-Pacific for about 25 years with its primary focus in India where it has 77 hotels. The company's portfolio in the region now numbers more than 100 hotels - including 13 hotels on the mainland, two in Australia and a few in Southeast Asia - with another 15 in pipeline, Berg says.
Under the new ownership of HNA Tourism Group, Berg says Carlson is excited about opportunities to explore other gateway cities in China, and is not afraid of entering second- or third-tier cities.
HNA Tourism Group Co Ltd, a division of Hainan province-based conglomerate HNA Group Co Ltd which owns Hainan Airlines, agreed to buy Carlson Hotels Inc in April in a deal reportedly worth $2 billion, Bloomberg reported.
Carlson operates seven brands from mid-scale up to luxury, he explains, which are Quorvus Collection, Radisson Blu, Radisson, Radisson RED, Park Plaza, Park Inn by Radisson and Country Inns & Suites brands.
Berg says while the company will continue to focus on Shanghai and Chongqing, the takeover by HNA means there may be better opportunities in Hainan province.
"We are very excited about the Chinese market in particular. We are expanding our brands and historically it has been Radisson Blu and Park Plaza. In Chongqing and Shanghai we have four hotels, and then we (will) expand around those two cities," Berg says.
"This year, we are introducing the Park Inn and Radisson brand of our hotels into Chinese market."
Berg says that Carlson is working very close with HNA to develop its next strategy.
"The exciting thing about the new partnership with HNA is they are committed to put in the right capital, the right resources to Carlson's portfolio and the management team to grow the business to be a top global hotel company. The exact roadmap is what we are working on right now."
Berg stresses the strength of the Chinese economy, with a real GDP growth of around 6.5 percent, the middle-class will continue to grow so many opportunities remain in China.
He says one of the strengths of the company is the diversity of its brands, so it can tailor to China's many cities and its different types of customers.
He says the Radisson RED brand targets millennials who love fashion, art and music, and who are looking for a hip experience. The more traditional Radisson hotels are more upscale, but also provide good value.
"We are seeing more intra-China and intra-Asia travel from the Chinese travelers. We have our newest brand called Radisson RED, from our lifestyle selective category, which is a heavy bent on technology so it is very attractive for our developers to build," he says.
"We think with the growing millennial base in China, while consumers have that extra money to spend, it will be a very good offering from us."
A Radisson RED will soon open in Shenzhen, following launches in Shenyang and Guangzhou, and Berg says the company is excited about the opportunity for that brand.
He says there are also less customers looking for full service hotels, with the trend moving towards people that don't need 24-hour service - they don't even need a front desk. Instead, they want to be technology-enabled, which means not only great Wi-Fi but "wow factor" when it comes to advanced technology.
"They want to see some cutting-edge things from a technology standpoint."
A hotel's lobby and social spaces have now become incredibly important, he says. Hotels are ditching traditional couches and formal settings, instead preferring open areas where customers can share a communal table.
Another growing trend is loyalty programs and rewards, where people still value "points" that they can cash in for complimentary stays. Berg says millennial travelers are looking for better customer service as an elite member, which could include getting an upgrade or a free bottle of wine.
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(HK Edition 12/12/2016 page9)