Going Solo – The launch of Radisson Hotel Group Americas

From its humble beginnings in the 1960s through the acquisition by Jin Jiang International Holdings Co. Ltd. in 2018, Radisson Hotel Group (RHG) has been through many changes. This year brings another major one as the Americas business has branched off into a separate organization, completely independent of Jin Jiang involvement.

“Due to our company’s international ownership by Jin Jiang international Holdings and to adhere to U.S. regulations, last year around July, we entered into an agreement with the U.S. government to separate the Americas business from the other parts of the business,” said Jim Alderman, CEO of what is now called Radisson Hotel Group Americas (RHGA). “That was a year-long process and, as a result, there are two Radisson business organizations which, together, represent the company’s brands globally: Radisson Hotel Group Americas represents the United States, Canada, Latin America and the Caribbean, and Radisson Hotel Group represents Europe, the Middle East, Africa and Asia-Pacific.”

He continued, “There are no real functional ties between the organizations as far as operationally; we have complete operational independence from the other RHG business. Each business organization has a full operational team to deliver our exceptional experiences on a worldwide basis. RHGA is 100% self-governed in the United States, with a U.S.-based board of directors comprised of all U.S. citizens to provide the governance, strategic guidance and oversight. Jin Jiang remains the shareholder of both organizations.”

It wasn’t easy separating a large corporation like RHG, he noted. “I had put up a poster on the wall that showed from start to finish, over a 12-month period, everything we did—all the milestones we hit—and they’re in red, green, blue and white,” said Alderman. “It looks like a subway stop going from one end of metropolitan New York to the other.”

Even though the companies have separated, RHGA still greatly benefits from the worldwide brand name recognition. “We deal with a lot of owners who have assets throughout the United States and they certainly travel abroad,” said Alderman. “Some of them also own properties throughout the world. Radisson Blu is the number-one upper-upscale hotel chain in Europe. Federico [Gonzalez, CEO, Radisson Hotel Group] has the fastest growing pipeline in Africa, and it helps us. We have a huge presence of Radisson Blu in India, which really does help us out for recognition with one of our largest and most important constituencies, which is the members of AAHOA. It really helps out to have such a great presence everywhere.”

Business as usual

Operationally, the company remained virtually the same during the entire process of the separation. In fact, many Radisson hotel owners may not have even realized the extent of the complexities of the project.

“When the process of launching the America’s business started, we made a commitment to our owners to keep everything business as usual,” said Aly El-Bassuni, COO, RHGA. “We promised this project would not have an impact on their day-to-day [operations], and we’ve kept that commitment. Our teams did all the heavy lifting from an IT and commercial perspective. They laid much of the groundwork to separate our businesses and launch our new systems as a standalone organization.”

At the same time, the franchisees were trying to survive the biggest threat to their livelihoods, the COVID-19 pandemic. El-Bassuni noted that RHGA was there trying to help them any way it could.
“We made sure we were pulling all the right levers to capture business where it was available and where the demand was present, and it’s been working,” he said. “In 16 out of the last 18 months we, as the Americas business, have grown market share and RGI (revenue generation index) compared to pre-pandemic performance.”

New faces on board

With the new company came some additions to the executive team, most notably Tom Buoy, the new EVP/chief commercial officer, and Paul Adan, who will lead Latin America and Caribbean development and operations as the region’s managing director.

“I worked with Tom at Extended Stay America, and he’s brilliant and extremely analytical,” said Alderman. “One of the things I admire most about Tom is he stands up for what he thinks is right and what he believes in, even if it means challenging opposing views. He has no problem challenging me, and I appreciate those challenges that are fact-based and really make the organization better. Paul formerly worked at Marriott and Hilton, so [it’s great] to have someone with the legacy of those companies to join our company and [help us] really grow in an area that we have not necessarily placed the highest emphasis on as far as staffing.”

Tanya Taylor also joined the company as EVP/general counsel, while Michael Fisher, who previously served as chief human resources officer at Loews and White Lodging, was also brought in to serve the same role at RHGA. Alderman called him “a superstar.”

A loyalty program of its own

RHGA has launched a new website of its own, but the biggest change from a guest-facing perspective is the new loyalty program, Radisson Rewards Americas. Alderman said it was the most important part of the process because “if you want to start upsetting consumers, start to tinker with the rewards program.”

“We had no choice,” he said. “We had to separate the programs because of how much information guests allow rewards programs to capture about themselves. They have a lot of data, and we can’t have the data for U.S. rewards members going outside the U.S. and vice versa. The thing about the program that was the most complicated was truly separating the data and getting all of it out, and that took it quite a bit of time—close to 10 months.”

Radisson Rewards Americas features upgrades from the original program and new benefits, including a simplified awards chart.

“We doubled the number of hotels that were available at the lowest redemption level of 15,000 points, and about 30% of our hotels require fewer points to book an award night stay than they did pre-split,” said Alderman. “We now have five categories instead of seven, starting at 15,000 points for a standard room and then increasing, capping out at 75,000 points for a hotel in category 5. We have a discounted redemption rate for members called RewardSaver, which is an industry-leading discounted redemption rate that saves the members 33%.”

There is also Global Points Transfer, where members enrolled in both programs can continue to redeem points globally and have the opportunity to transfer the points between them at a one-to-one rate. “There’s no having to get scheduled to match it up or anything like that,” noted the CEO. “We will also status match in between programs—you will have to have two separate numbers, but we will status match.”

Choosing which program members were put into—Radisson Rewards Americas or Radisson Rewards for the rest of the world—came down to their country of residence (for those who only travel domestically) or their travel pattern.

“If we had someone that was located outside of the Americas, but always traveled in the Americas, then we put them in the Americas,” said Alderman. “If they have traveled only outside of the Americas, they were assigned to Radisson Rewards. It was meant to be as seamless as we can with two separate programs.”

Other guest-facing changes include a dedicated Americas mobile app which, Alderman pointed out, “has the same look and feel as the website, but it only features our hotels, our destinations and our curated deals,” adding, “And we also promote all the brands under the Radisson Hotels Americas umbrella across various social media platforms vs. Radisson Hotel Group, so everything is nuanced with Americas now as the identifier.”

Brand update

Alderman said that there will be some forthcoming updates and changes to RHGA brands; however, the separation from the global company was not the reason.

“Country Inn & Suites is in generation four and we are working with Aly and his team on the next generation,” he said. “We are also working to do some more work on Country Inn & Suites as far as increasing its visibility and emphasizing Radisson a lot more. Right now, it’s the sixth word in the brand—Country Inn and Suites by Radisson—so it is pretty small when you see it on a normal sign. I’d like it to be a little more prominent and take advantage of the great awareness that Radisson still has based on our consumer studies throughout the country. As far as the other brands, we are free to reimagine those brands in our territory, so you will see some updates to them as well.”

He added, “We really believe that it’s time for Radisson to re-emerge as the first name of almost all of our brands. I’m not going to make it the first name of Country Inn & Suites because it is our largest brand and you don’t interfere with something like that, you just try to make it better and drive more ROI for the owners. So, we’re focused with all of these brands on taking advantage of our greatest assets, which are our loyal owners and the Radisson name.”
One segment that is missing among the RHGA flags is extended-stay, and there are already plans to add a brand in that category.

“We’re not ready to reveal how we’re going to do that, but we certainly have the people who can support it, with my background and Phil’s [Phil Hugh, chief development officer] background in it,” said Alderman. “The team overall has a background in it as well, and then we hired Tom Buoy, who built a commercial engine at Extended Stay America. When you get into a new brand segment or you decide to explore new brands, you just can’t say you’re going to do it without any ability to provide those services to your guests.”

On the development front

Hugh was brought into the fold in July 2020 and, despite the crisis in front of him, has helped grow the RHGA portfolio.

“Jim gave me a great opportunity; I feel like I’ve got the best job in the business,” Hugh said. “He let me handpick a team, who are experts at what they do. Most of them, like me, have a solid operations background, so we walk into the meetings not as salespeople, but as consultants to find out what’s the best use for the asset. He also allowed me to create internal departments that not only support franchise sales but all departments in the company, so that we can service our franchisees better.”

The executive pointed out that none of the RHGA brands compete. “Country Inn & Suites doesn’t compete with Radisson; Radisson shouldn’t be competing with RED or Blu,” he said. “We’re not sitting there with the same RevPAR for every one of our brands that would then compete in a marketplace, so we have true separation.”

For Hugh, it’s all about relationships and how to treat each of them. “We realize that everyone is unique, and everyone has to be looked at from what is important to them,” he said. ”How do we help them grow their portfolios? How do we help them sell assets? How do we help them acquire hotels? At the end of the day, what my team does is consult, but we’re selling Aly and the rest of our company; we’re not selling ourselves, we’re selling what those people do”

Since October 2020, Hugh noted, the core Radisson brand has grown by more than 40%. Among the openings in the Americas since then have been hotels in Barranquilla, Colombia; Grand Rapids, MI; Sacramento, CA; Panama City Beach, FL; Miami Beach; and Memphis, TN.

“We’re where we need to be with regard to applications in house,” Hugh said of the brand. “Closed deals are slow because owners are cleaning rooms and working the front desk due to staffing issues, but that’s starting to close up as we’re in the first summer of conventions. Normally, it’s quiet in July and August in the development world.”

Since Hugh has been with the company, Radisson Blu has opened properties in Anaheim, CA; Toronto; Punta Cana, Dominican Republic; Fargo, ND; and Palm Beach, Aruba. Country Inn & Suites has opened locations in Pierre, SD; Tampa, FL; and Macon, GA, while Radisson RED has opened “a phenomenal hotel in Miami with a design that does a fantastic job of capturing the essence of this gateway city’s unique culture,” noted the chief development officer.

Then, there is the newest brand, Radisson Individuals, which launched in October 2020. The brand’s first property in the Americas, Sebastian Hotel, a member of Radisson Individuals, in St. Augustine, FL, opened in March.

“We did the Individuals brand as our approachable soft brand,” said Alderman. “The Radisson Collection, which sits at the top of our brand strata, is both a hard and soft brand on a global basis. Radisson Individuals is really closer to the bulk of the segments that we play in and has a span of three to four stars. We purposefully led with the name Radisson because it still has incredible awareness among consumers even compared to brands out there that are five times our size in the U.S. So, when Phil and I were talking about Individuals, we named it not ‘by Radisson’ but Radisson as the first name. That, we believe, is really going to pay some big dividends for us. We’re about to sign our fourth or fifth [Radisson Individuals hotel], and we think it’s going to take off for us.”

Hugh added, “It allows that creativity that these entrepreneurs need as hoteliers. Many of them want to have a consistent box, but a lot of them want to add their own individuality, spirit and energy into the property. We’ve got one [coming up] in Dodgeville, WI, and one in Joplin, MO, and we’re working on the major cities like Los Angeles and New York right now.”

Another development is an alliance with Commonwealth Hotels to convert hotels into a mix of hotel and veterans housing in partnership with Veterans Services USA.

“[Commonwealth] came to us due to a relationship with Bill Hall, our SVP of sales,” said Hugh. “He’s known Brian Hayes [Commonwealth’s managing director/vice chairman] for a long time. Commonwealth said it was going to buy big-box hotels and convert them into veterans housing. We are going to take 400 rooms down to 150-200 that are going to be more competitive in the marketplace, renovate them and create separate entrances, fitness centers and lounges, and really make a unique statement in the business. We’ve signed nine with them and I’m hoping for another six to seven over the next 45 days.”

New headquarters

In January, RHGA will be relocating its Minnesota-based headquarters from Minnetonka to the newly built 10 West End building in St. Louis Park about seven miles away. It’s purely coincidental that the move will happen six months after the separation.

“Our lease was up and we didn’t need all the space we had here,” said Alderman. “I’m a very social person and very approachable, so I don’t want to be on two different floors, so we needed a bigger footprint.”

The RHGA headquarters will take up 36,000 sq. ft. of the 11-story building, and the company’s name will be on the facade. “It’s a great location and much more convenient for our employees,” he said. “It’s brand new, and new beats old every time. I’ll also be able to see everybody, every day. We also have 250,000 cars per day that pass through the intersection [of the building].”

El-Bassuni added, “The timing of all this was somewhat coincidental…but having to make that decision, there’s something that makes sense—a new beginning and starting the next chapter out in a new location.”

Alderman is optimistic about the future of RHGA. “We’ve put together a heck of a team, and we have a terrific legacy name with Radisson,” he said. “We’ve all succeeded where we’ve been before, and we are going to take this building full of talented individuals which used to focus on the entire world and train their focus on just the Americas. We’re going to take what we’ve learned from the places we’ve been and the growth we’ve seen, and supplement the lowest cost delivery of a reservation to guests to the owners that we can possibly work towards, which should be the goal of every franchisor out there. The [future] is so bright.”