Rezidor Hotel Group: Developing an iconic brand across Africa

One of the spin-offs of economic and infrastructure development across Africa has been the emergence of a hugely competitive and growing hotel industry. Of course the hotels provide the setting for meetings and accommodation for visiting businesses – and have long been regarded as a catalyst for foreign investment. For the Rezidor Hotel Group, Africa represents an exciting opportunity to reinforce strong company values steeped in environmental and social enhancement.

Rezidor

The business first established a presence in Africa in 2007, when Andrew McLachlan, Vice President, Business Development, Africa and Indian Ocean Islands, joined the company:

I opened the African Development office in 2007 and since that time we have opened 43 hotels across the Continent and are regarded as the fastest growing hotel company in Africa.

We are very ambitious and looking to grow further by focussing on our 2 brands here: Radisson Blu and Park Inn by Radisson.”

The Rezidor business has a long history that started back in the 1960s in Scandinavia and to this day the company has a listing on the Stockholmn Stock Exchange, although the world headquarters are located in Brussels, Belgium.

We opened our first hotel in 1960 in Copenhagen and the business was owned by SAS Airlines at that point. The hotel chain grew as the airline expanded its footprint, opening new hotels where regular flights were scheduled and by 1994 we had grown to 29 hotels, mainly in Scandinavia,” McLachlan recalls.

By 1994 the business had developed global ambitions and significantly it approached US –based Carlson with whom and an agreement was reached to launch new Carlson hotels, using the Radisson name in Europe and the Middle East. By 2000 that agreement had stretched into Africa for the first time under the rebranded name Rezidor.

By 2002 Rezidor was operating 3 brands called Park Inn, Regency and Country Inn & Suites – at that time Carlson took a 25 per cent stake in the business.”

In November 2006 Rezidor became a publicly listed company under the new name of Rezidor Hotel Group, with Calson increasing its stake to 33 per cent. In 2009 the business had tweaked its name from Radisson SAS to Radisson Blu, which McLachlan says was an instantly recognisable brand for customers.

By 2010, the company had opened 130 hotels in 26 countries and in addition to Radisson Blu, had introduced Park Inn by Radisson, as the younger brother to the well-known Radisson brand. At the end of 2012 Carlson increased its stake to 50.03 per cent and the decision was made to merge a number of operations in order to become more globally aligned.

Today the hotel chain has 51 hotels in Africa, with 24 open and 27 currently under development. Across the Continent, the business employs some ????? people.

My role would be to identify cities and countries that we want a hotel presence in,” McLachlan explains; “and to then find local partners who own the land and have local knowledge.

This involves a lot of research and again accessibility to flights in and out of a city is a key component to our decision –making. We look at the demographics of the population and the people that travel to an area – our approach in Africa has concentrated on the business customer who accounts for almost 90 per cent of our business.

Our primary focus is on the GDP growth of a country (7 of the 10 fastest growing GDPs in the world are in Sub-Saharan Africa); political stability; the different economic communities in Africa and the air lift for prospective cities.

Having found a location and partner, we then decide on the hotel itself – and whether it will be a 3 star, 4 star or 5 star hotel, whether there will be a swimming pool, how many restaurants and so on.

If the owner does not have a professional team in place we can assist them with preferred consultants when it comes to design and build,” he continues. “We will hand-hold the owner through the entire design and construction period and later on we help with the pre-opening marketing and training strategy, which usually commences around 9 months before opening date.”

McLachlan says Rezidor’s main focus is on managing hotels for owners rather than real estate – and that is a trend followed by most of the leading hotel chains on the Continent. Owing to the “drastic lack of quality hotels in Africa” as much as 50 per cent of Rezidor’s activities centre around new build projects, with the chain’s oldest hotel just 14 years old and most built since 2008.

Training is of course of paramount importance for a business built on corporate expectations: “In Africa we are fortunate to have lots of people with the right attitude, who want to learn and develop new skills.

Our approach is that if you have a good smile and the right attitude we will point you in the right direction for career development. There are many people who lack experience – for example next year we are opening a new hotel in Free Town, Sierra Leone – a country which suffered for many years from civil war. Consequently there are few hotels there and most people simply lack the necessary skills.

At Rezidor Hotel Group we aim to train and develop previously disadvantaged people. Of course in South Africa that mantra also embraces Black Economic Empowerment – not just in terms of recruitment but also using local black owned suppliers where possible.”

As one might expect, Radisson Blu has developed a number of features to attract corporate travellers, as McLachlan explains:

We have introduced our “One Touch Service” which enables the customer to contact a consultant at the press of one button when they require anything. Additionally, we have provided free wi-fi for customers for the past decade – most other hotels will charge visitors for this service.

We also supply the renowned Radisson Blu Breakfast which offers a wide range of choice and helps to get business travellers off to the right start. And if a customer is not happy for any reason, we offer 100 per cent guest satisfaction or your money back,” he adds.

With 6 hotels operating in South Africa and another 3 under development, the nation is certainly one of the focus countries in Africa for Rezidor. Indeed MacLachlan says that the company even changed its ownership structure to include a joint venture with a local black-owned business.

Within South Africa perhaps the flag ship hotel is the Radisson Blu Hotel Waterfront, Cape Town, which has won the label of the most energy-efficient Rezidor property across Africa, Europe and the Middle East.

With rising energy costs and an environmental conscience which comes with our Scandinavian DNA, we started to look at smart energy saving systems like replacing light bulbs with LED bulbs and using smart building management systems for our boilers and hot and cold air systems.

We achieved 27 per cent savings very quickly, which was a huge achievement given the energy rises in South Africa,” says McLachlan.

It is an approach that is now being rolled out across Rezidor’s African empire.

McLachlan joined Rezidor in 2007 and when he established the African operations, he ensured these were based in Africa and utilised African skills and knowledge.

That approach put us at a big advantage over the other major brands in Africa, who were based elsewhere and often deployed ex-pats lacking knowledge of local customs and opportunities. By 2011 virtually all of our main rivals had opened development office here but we retain our entrepreneurial spirit and by being empowered on the ground, we are able to react quickly and make fast decisions,” he asserts.

Competition has increased though and 3 years ago there were 40 hotel brands in South Africa – today there are over 70. We see competition as good and we maintain our focus on a local approach to development.

We have paid our school fees and we see the next 50 hotels being easier to establish. Nigeria may become an important focus for our Park Inn brand but there are 54 countries in Africa and we want to have a presence in at least 30 of these (we are at 21 currently),” he concludes.