Rezidor Gets More Brands

Travel Business Analyst US-based Carlson Hotels has turned over brand development in Europe, Mideast, and Africa, to the current franchiser of one of its brands, Rezidor SAS.
Rezidor, 100% owned by SAS Scandinavian Airlines, has had the Radissson franchise for most of Europe since 1994, and has expanded this selectively to parts of the Middle East and South Africa. The new agreement, however, covers Europe, and all of Africa and the Middle East - making Rezidor the master franchiser for the four Carlson prime brands, but not a sub-set of one of those brands, see below.
In addition to the Radisson brand, Rezidor will now also franchise Carlson’s Country Inns, Park Inn, and Regent. Unlike the Radisson brand - which is named Radisson SAS in Rezidor’s franchise areas - the new brands will not have either Rezidor or SAS appendages.
In addition to new contracts, Rezidor will take over existing management and franchise contracts for these brands in the region - although this is only 14 hotels, see table.
Carlson says each of the four brands reach a distinct market segment - Regent, luxury; Radisson “upscale”; Country “mid-tier”; and Park Inn “economy to service”. This is arguable; many would put Park Inn at the same level as Country Inn.
And this brand conflict would appear to be the reason why Carlson’s Park Plaza (even though part of the Park brand) is missing from this new agreement with Rezidor. We would put Park Plaza at the same level as Radisson.
In fact, Carlson’s earlier decision to take over the two Park brands looks inexplicable at best, and bad at worst.
Carlson signed a joint venture with Park Hospitality owner Olympus in 2000 to expand the Park Inn and Park Plaza brand in North America. But Park has lost brand awareness due to a complex ownership, including franchises of the name, and resulting weak promotion. This has not improved with the Carlson JV, and it may have worsened, and it certainly will deteriorate following this new agreement with Rezidor.
Also excluded from the Carlson/Rezidor agreement is Rezidor’s Malmaison, a “lifestyle” brand. Rezidor has not added or announced any new Malmaison hotel since Rezidor bought it in 2000, and with only five hotels in one country (the UK), the operation is beginning to look a failure for Rezidor.
However, the new agreement could solve problems at Regent. Established in Asia but now US-based, Regent has been losing more hotels than it is has been adding - despite a push in Europe.
This year the 54-room Schlosshotel in Berlin was reflagged a Regent. But the hotel is managed by Dorint Hotels, and the deal with Carlson appeared to be little more than a reservations and marketing agreement.
Apart from that, the brand has had two franchised hotels under development in secondary locations (in Malta, and on the French Riviera) - but both have been delayed. Even earlier, two hotels took the Regent name in London (one being the Dorchester), but both were subsequently lost, as was what is now the Four Seasons in Milan.
Since buying the Regent name from Four Seasons in 1997, Carlson has added one hotel worldwide - Berlin - although three contracted before 1997 have also opened. Today, Regent has the same number of hotels as it had in 1995 - 12.
This year we said this slow progress raised the possibility that the Regent name would be sold again. In fact, the agreement with Rezidor is another way of Carlson admitting its failure with Regent - but also with Country and Park in Europe.
Although Rezidor earlier told Travel Business Analyst that it was not interest in the Regent brand, it should do better than Carlson. Part of the top management at Rezidor was running the company when its parent part-owned the Inter-Continental brand. IC was then at a lower level than it is now, but this experience should nevertheless help Rezidor to expand Regent.
Numerically the target for Rezidor/Carlson is to be operating 700 hotels (including existing ones) within 10 years; the total now is about 125. This would require opening an average of about 55 new hotels each year. That is a substantial increase on what Rezidor has achieved so far - an average of 11 annually - although Country at least should be easier to grow than Radisson.
Key development priorities for Radisson SAS are the three Benelux countries, France, Germany, Poland, Scandinavia, UK. For the Regent brand Rezidor says only it will add “a considerable number” in the next 10 years, in particular in the Middle East. Likewise, for the Country Inn brand it plans “substantial” growth. Park Inn will initially be added into Saudi Arabia, South Africa (Cape Town), UAE, UK. Numbers at Park Inn are expected “to rapidly increase” - although there are none at present.
Earlier this year, Carlson said it wanted to increase the Park total - currently with under 100 hotels in North America - to 203 by end-2003. That target seemed difficult, or if achieved it could be taking growth potential from other Carlson brands.
Rezidor’s plans for Country Inn need to be treated with caution - at end-2001 it said its plans to develop a 3-star brand were not with Country Inns. Development plans at Carlson show that it was aiming to open 50-70 hotels a year worldwide, which would be twice the current pace. The aim is to reach 1000 hotels; at that pace that would mean by 2012-15.
This new Carlson/Rezidor agreement seems to endorse continued corporate development for Rezidor. There had been speculation post-911 that SAS would look to sell its hotel operation, given losses in the airline business. At that time, a management buyout looked plausible, but now any new ownership change at Rezidor could also involve Carlson - still privately owned.

Carlson and SAS brands in Europe
Brand Hotels Notes
Country Inns 12 in Austria (2), France, Germany (7), UK (2)
Malmaison 5 Rezidor SAS brand, bought in Nov 00; not included in new agreement
Radisson SAS 114 includes Mideast and South Africa; 40 under development
Regent 2 in Germany, Kazakhstan
TOTAL* 128 16% of world total
Notes: There are no Park Inns. *Excluding Malmaison. Source: company.

This report originally appeared in the Europe edition of the monthly Travel Business Analyst newsletter, under editor Murray Bailey. Further details can be obtained from or

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