It’s been a busy few months for Radisson Hotels, which along with Hilton and Marriott remains the international group with the most ambitious and active African development pipeline.
Perhaps even more impressive is the fact that it has achieved this status in a comparatively shorter space of time.
“I’ve been with the group for 17 years and I remember when it was just a ‘small cousin from the country’, trying to compete with Hilton or Marriott, and now in many markets, we’re bigger than they are,” says Cordon.
Radisson Hotels only entered Africa in 2000 with the Radisson Blu Hotel in Cape Town, and just 18 years later it has 45 hotels in operation and a pipeline of roughly another 45. This year alone, the group has announced the signing of 10 new hotel deals in Africa, including eight at AHIF.
That group of properties includes three in Nigeria, a second Radisson RED on the African continent in Abidjan (Ivory Coast), a new build in Casablanca (Morocco), a Park Inn by Radisson in Tunis (Tunisia), a property in Conakry (Guinea), and Radisson’s first hotel in Niger. All of these properties are expected to open in the next three or four years.
“We believe in Africa and we believe in the opportunities here,” says Cordon.
Like most of the other big international groups, Radisson Hotels has an ‘asset-light’ model, meaning it doesn’t put up much in the way of capital for new hotel projects, and instead prefers to enter into management agreements with land owners – something the international groups have been criticized for by some commentators, although that situation is changing, with the likes of Hilton and AccorHotels announcing in the past year that they have launched specific funds dedicated to greenfield and conversion projects.
“We’ve highlighted key markets in Africa where we are prepared to at least look at other ways of doing business, whether that’s an investment in order to help an owner develop a hotel, renovate it, or re-position it, so we can brand accordingly, or whether there’s a more strategic alliance for perhaps a portfolio deal,” says Cordon.
On the subject of conversions, it was definitely one of the hot topics emerging from AHIF, with just about all the groups acknowledging the opportunity that exists in this space, with a host of unbranded hotels in Africa and the opportunity to offer these owners an international brand and all that comes with it.
“Conversions are extremely attractive,” admits Cordon, “and we obviously believe that most of those hotels could do a lot better with the help of a brand. It’s a good way to also add value to an existing hotel and develop our brand more quickly in a particular market.”
The other hot topic was the mid-market space, with the African continent fairly well-populated with five-star hotels and crying out for quality ‘select services’ brands. Hilton has already dived into that space with the roll-out of its Hilton Garden Inn brand, and it seems that Radisson Hotels is of a similar view, with Cordon pointing to the group’s ‘Radisson’ brand.
“It’s already well-established in the Americas and Asia-Pacific, but we’ve now developed the brand and made sure it’s suitable for global markets,” says Cordon. “It’s been interpreted slightly differently for the Europe, Middle East and Africa region, and that brand, I think, represents a massive opportunity as a commercial brand.”
The other issue on the lips of most of the delegates at AHIF was that of the August news that HNA Group had agreed to sell its holdings in Radisson Hospitality AB and Radisson Holdings to a consortium headed by Jin Jiang International Holdings, which is controlled by the Shanghai government. The transaction could make Jin Jiang one of the world’s largest hotel operators with 344,000 rooms, STR estimates.
“We’ve met with the guys and they seem very excited about our five-year plan, our investor partners, our owners, and our leadership team,” says Cordon. “If everything goes according to plan, we would actually become the second-largest hotel company in the world.”
Not bad for what used to be the “small cousin from the country”.