|by Murray Bailey, February 2005
Interview: Paul Kirwin,Carlson Hotels
The Carlson group’s hotel brands are Country Inn, Park (Inn, Plaza), Radisson (Hotel, Plaza), and Regent.
We believe the company has underperformed in Asia Pacific, particularly with its Regent brand, which it has been operating since 1997. Regent, once Hong Kong-based, has lost most of its hotels in the region, mostly to Four Seasons’ rebranding.
Four Seasons, a previous owner of Regent, presided over a significant decline in Regent hotel numbers during its period of control. Carlson bought what became an empty shell and which, although having residual brand value, needs substantial rebuilding – in image as well as in hotels.
Paul Kirwin became head of Carlson Hotels in Asia Pacific in September 2002. The following is a paraphrased interview with Singapore-based Kirwin about his regional priorities.
Corporate. Two years ago we decided to expand our presence in Asia Pacific including growing the Regent brand. That is when I opened the regional HQ in Singapore.
An Asia presence is important, so in addition to Singapore, we have offices in Delhi, Shanghai, and Sydney, plus a small sales office in Tokyo.
We had started in the region by franchising hotels. That worked well until Asia’s 1997-99 financial crisis, but when we looked again, we decided to come back as a manager rather than a franchiser.
But maybe what we did two years ago we should have done five years ago.
We have been busy. We have signed contracts for 18 hotels, about 12 of them in the past two years. As more of these open, then we will get more credibility. The company has given us capital to get that expansion.
In addition to those announced (see Table 2), we hope to finalise discussions for Singapore and open before year-end, we are in advanced discussions for two more Radissons in Shanghai, and we are bidding for Radissons in Indonesia, including an existing hotel that could be re-branded.
We don’t do 5-year plans any more; just three years.
Country Inn. Although this is the brand that Kirwin headed before he moved to Asia, the group has no specific plans or targets for Country in Asia Pacific.
Country Inn is a limited service product. In the US this segment started at the budget level and then expanded into more segments. In the next 5-10 years there could be bigger potential for Country Inn in Asia Pacific because segmentation will have grown.
Park. The Park brands are our newest. We feel the biggest travel in the coming years will be intra-Asia – China, India, and others. And Park is suitable for this segment.
We have a Park Plaza signed for Beijing, and are close to signing for one in Shanghai.
We also wanted Park Inn for China. We are watching Accor’s progress with its Ibis product (it has one, in Tianjin). We think over the next 5-10 years, China will be a good market for PI, but not in the next five years.
We also think there is potential for PI in Australia.
Our plans are to get 2-4 PP over the next two years, and we could do 6-8 a year for PI. We are adding a couple a year now, but probably 4-6 years before we reach that faster pace.
Radisson. Over two years in the US we have been moving Radisson upscale. Some were upscale, some were not, because at one time we had just this brand in that segment (Park and Regent have come in the past seven years), so we had variations in the Radisson brandname to cover differing hotel standards. So we have been working with owners to change – to upscale, switch to Park Plaza, or leave the group.
In Asia Pacific, we want to get the brand into the gateway cities. For instance, we have an opportunity for a new-build Radisson in Hong Kong, in Causeway Bay.
We should be doing 4-6 contracts in a year, but key to us is getting them in the key cities, and resorts like Bali and Phuket. If they are all in secondary cities, then we will be disappointed.
Regent. We see the Regent brand coming back. Our focus is the main gateways and resorts (about 12), except in China.
We have Beijing, Ningbo, and Shanghai, under construction and due to open 2005 and 2006. The owners are different, each local; we find that more effective.
Their designs may make a statement in the way that the Hong Kong Regent (now an InterContinental) did - but of course you cannot replicate that.
But when we go back to Hong Kong it has to be with something special; it cannot be an ordinary luxury hotel. But the market for buying luxury hotels there is not very active; we have had talks, but preliminary.
We particularly want to get Regent back into Bangkok, Hong Kong, and Jakarta, but we also see potential for Regents in Bali and Phuket. (The Four Seasons in Bali was contracted by Regent’s pre-FS owners to open as a Regent.)
Our goal is to sign two Regents a year, and then we would be opening two a year. We have signed two this year, and then will be opening two in the next year; we will replicate that.
To help boost the Regent name, we are exploring the possibility of changing the name of our cruise company from Radisson Cruises to Regent Cruises. I hope to announce something before year-end.
New Carlson hotels in Asia Pacific
Raffles International and Taj Hotels Marketing Alliance
Singapore-based Raffles International and India-based Taj Hotels have signed a marketing alliance. Raffles has 37 hotels mainly under the Raffles and Swissotel brands; Taj has 70 hotels, mainly in India, most under the Taj name.
The alliance will have two phases:
Phase One. Cross marketing for Raffles’ Raffles brand (12 hotels) and Taj Luxury Hotels. Of the Taj 14, three are outside India - Maldives, Mauritius, and London.
That indicates one potential problem as Taj’s London hotel is at a lower level; in fact it operates as a franchised Crowne Plaza.
Phase Two. For Raffles’ Swissotel and Taj’s Business and Leisure Hotels - sic. No dates fixed, and no details known.
This agreement highlights problems with the groups’ brandnames – particularly for Taj.
The Taj group has decided to keep the Taj name on all levels of hotel, using descriptions to determine the level, rather than a brand name. Thus its ‘Taj Business and Leisure Hotels’ is a quasi-brandname -but one that likely has little motivation for travellers. Likewise, in effect for the Luxury level, but as this is the general market association with the Taj name, this is not an important factor.
For Raffles, having the group name the same as one of the brands, leaves its other brand, Swissotel, dis-associated. Although not a unique situation (InterContinental has done the same – deliberately), this is nevertheless a market situation that will eventually need to be changed.
Planned hotels at Raffles group
to be branded Swissotel after refurbishing work.
|Also See:||Murray Bailey's Update / Big Hotel Groups / April 2003|
|Carlson Hotels Enumerates Expansion Plans in Asia Pacific / Murray Bailey, Editor, Travel Business Analyst / Feb 2003|
|Retro Rates?; Big Event Blues - Murray Bailey, Editor, Travel Business Analyst / Oct 2002|
|Despite Push in Europe, Regent Is Losing More Hotels than Adding / Sept 2002|