As the Radisson Hotel Group continues to expand its footprint on the African continent, Andrew McLachlan, the group’s Senior Vice-President for Development, responds to some questions regarding this rapid expansion.
Q: With 2019 coming to a close, what has been some of Radisson Hotel Group’s highlights for the year in Africa?
A: We have had a busy year in development, concluding 14 new hotel deals, and we hope to conclude another four before Christmas. Highlights include the ground-breaking of the second Radisson RED hotel in South Africa, in Rosebank, Johannesburg; the introduction of our fourth hotel brand to South Africa, “Radisson”, an upscale full-service brand (four-star); entering a new country, Madagascar with a portfolio of three hotels in the capital city Antananarivo; opening the Radisson Blu Hotel & Conference Center Niamey in Niger in record-breaking time – from ground breaking to the hotel opening was a mere 11 months, including the construction of a 15-storey five-star hotel tower with 189 rooms and a 2600m2 conference centre.
Q: Since the launch of Africa’s first Radisson red two years ago, what progress has been made for the brand on the continent?
A: Our first Radisson RED opened in Cape Town and it’s been a huge success. The performance of the hotel and its restaurants and bars has been very good. Our customers simply love it, so this hotel has been a great RED brand builder for us, considering the hotel brand is so new. Over the two years of trading we have been able to improve the offering and, as the product keeps improving, we too have improved the brand offering, making the Rosebank property RED ‘Version 2’. In September we broke ground in Rosebank and will open our doors on 1 February 2021. We have a third Radisson RED under development in Abidjan, Ivory Coast and we are negotiating a few more hotel deals across markets such as Dakar, Dar es Salaam and Nairobi. RED as a brand has great legs to enter the trendy neighbourhoods of gateway cities across Africa and our target is to have at least five Radisson REDs in Africa by the end of 2022.
Q: Tell us about the two new brands introduced to Africa last year, Radisson Collection and Radisson.
A: We have big ambitions to grow our portfolio in the four-star segment in Africa with Radisson. Positioned as ‘upscale’, Radisson is perfectly positioned in-between Radisson Blu and Park Inn by Radisson in quality of product, cost to build, room rates and facilities. The brand’s essence is “Scandinavian design and culture at heart” and is underpinned by the natural Scandinavian way of life. The brand and product at Radisson enable our guests to find balance in their hotel experience, with relaxing spaces, thoughtfully considered details and unexpected delights. With a style of timeless designs with clean lines, soft textures and contemporary materials, we are confident the brand will become very popular across Africa. Our first Radisson to open in Africa was in Dakar, followed soon after in Lagos. We expect that 50% of our future hotel openings will be Radisson in at least 30 cities across Africa.
Q: And Radisson Collection?
A: Radisson Collection is a premium lifestyle collection of iconic properties located in unique locations. The character of each Radisson Collection hotel feels authentic to its location and offers the ultimate template for contemporary living, united by the modern design of exceptional experiences across dining, fitness, wellness and sustainability. Designed for guests and locals alike, each Radisson Collection hotel is defined by the people who visit them. Since the launch of Radisson Collection in March 2018, the brand has launched hotels in Scandinavia, the Middle East and UK. The first new-build Radisson Collection in the world will open in Africa in 2020 in Lagos. The brand is positioned above Radisson Blu in a segment we call ‘Affordable Luxury’. The brand can grow across Africa, but not on the same scale as Radisson. We aim to debut this brand within a lifestyle safari space, in addition to hotels and resorts in the future.
Q: Radisson Hotel Group currently has 13 hotels in operation and under development in South Africa. What’s next in this country?
A: We expect to grow to 15 hotels by the new year. South Africa is a market that offers scale, is more sophisticated and offers different opportunities to the rest of Africa. Park Inn by Radisson is a cost-effective brand with lower capital investment and true scalability. With a strategic partner, we plan to take this brand across the nine provinces of South Africa over the next five years. Radisson and Radisson Collection are good conversion brands, which we can use to take over existing hotels, rebrand and reposition for hotel owners, improving returns. Our future growth will be a combination of new-build hotels and takeovers in South Africa. Lastly, Durban is missing a RED.
Q: Which markets will Radisson Hotel Group be focusing on in 2020?
A: Our focus for growth is city (vs) country, where we can create multiple hotels in the same city, positioned in different market segments. In 2020 my team and I will continue to focus our growth on the gateway cities of Cape Town, Johannesburg, Durban, Lagos, Nairobi, Addis Ababa, Abidjan and Dakar. We are hopefully breaking into new cities and countries such as Dar es Salaam, Pretoria, Seychelles and Kinshasa. In addition, we see a growing demand for hotel apartments. Our reaction to this demand is to offer a brand extension. With vibrant and distinctive designs, our serviced apartment concepts are an extension of our Radisson Collection, Radisson Blu, Radisson and Park Inn by Radisson brands. These properties offer long-stay guests contemporary design, beautiful living areas and magnetic social spaces.
Q: Where is the group in its five-year plan, ‘destination 2022’?
A: The group is one month away from completing its second year of Destination 2022 (our five-year strategic plan) and after the company recorded record profitability in 2018, it looks like 2019 is going to be even better. From a development point of view, we are ahead of target. During 2019 we had a change in shareholder. Our new majority shareholder Jin Jiang is committed to growth, so the future for the Radisson Hotel Group looks bright. There are plenty of opportunities in Africa, but it is getting competitive, so we need to work harder to see the angle and do the right deals. Well-located, well-positioned and correctly-branded hotel products with good concepts will beat economic and supply cycles.