According to a recent report by the World Travel and Tourism Council (WTTC), the contribution of the travel and tourism sector to the global GDP in 2021 rose over 21 per cent to reach US$5.8 trillion. That the industry would eventually recover from the blow it suffered in 2020 was beyond doubt – that it would do so at the pace that it did last year, was a surprise for many.
To the good fortune of a few players in the industry, they preempted and acted on the rushed return to normalcy. “We launched three different brands in the last three years – Collection, Radisson Red and Radisson Individuals which we launched during the pandemic,” Eric De Neef, executive vice president and global chief commercial officer at Radisson Hotel Group told Business Traveller Middle East.
At the Arabian Travel Market in May, Radisson Hotel Group projected the opening of 15,000 rooms and the signing of 330 hotels total in the EMEA and APAC regions this year. Currently, it has an operational portfolio of 52 properties in the Middle East totalling 11,211 keys. Furthermore, there are 25 properties under development, with the group projecting a portfolio goal of reaching 150 properties and 30,000 keys in the Middle East by 2030. The market that is expected to be the major growth driver for it is Saudi Arabia. “We’re going to double our portfolio in Saudi Arabia over the next three years. We are opening properties focused on the resort as well as business segment there,” said De Neef. Within the kingdom alone, the group currently has 42 hotels and over 8,000 rooms in operation and under development. It will also open a regional office in Riyadh this year to support the growth of its Saudi portfolio which will account for half of its entire presence in the Middle East. Its Mansard Riyadh property under the Radisson Collection brand opened in June this year and includes 191 rooms, serviced apartments, and duplex villas. The Radisson Blu Hotel, Riyadh Convention and Exhibition Centre meanwhile will open soon.
The GCC – which includes Saudi, the UAE and Qatar, among others – is a region that De Neef is optimistic about. “You have a growing inbound market within the GCC. Travellers coming here are spending more too. If you put in place the right guest experience, they are ready to pay. This is the number one region from a development of RevPAR perspective.”
Part of that guest experience is being flexible and adapting to the needs of the travellers – with the rise of bleisure, for example, very often business travellers are looking for a leisure experience to cap off their visit to a particular city. Responding to that need, Radisson has been developing its resort portfolio. The Radisson Resort Ras Al Khaimah Marjan Island was its first resort-focused offering in the UAE, while the Radisson Beach Resort Palm Jumeirah in Dubai will be its second. The group has been careful not to create a separate resort brand, but instead to subsume the resort positioning under its existing brands. “We didn’t create one resort brand. We added the resort value proposition to all our existing brands – therefore a Collection brand could be a resort, as could a Radisson Blu,” explains De Neef.
The strategy that the group will adopt with regards to new builds and conversions, as well as the operational models for each, is being kept fluid deliberately. Says De Neef, “You need to have lease properties as well as management. You have to define your strategy by the cities where you operate. If you think of Germany, for example, it is a lease or franchise market – you don’t have management. In Dubai, you’re much more into management contracts, and have fewer franchise contracts. You have different types of cultures, locations and cities and depending on these criteria, you define what is the best strategy. Also, you need to have a mix of conversions and new builds. Our Collection brand, for example, is much more about the conversion of an existing iconic property, rather than building from scratch. Radisson Blu on the other hand is more into convention centres which are newly built. All our brands need to be conversion friendly though.”
One of the biggest challenges to its growth, says De Neef, is the shortage of skilled labour. According to the WTTC report, the travel and tourism sector’s contribution to employment in the Middle East increased by 390,000 to reach 5.6 million jobs in 2021, accounting for 7.3 per cent of all the jobs in the region. It is forecasted that by the end of 2032, travel and tourism will create 3.6 million new jobs in the region compared to 2022. “Operationally, that’s one of the biggest issues that we have today. What we are doing is to therefore have a very aggressive recruitment wave linked to a strong training programme because a lot of people left [during the pandemic] and didn’t come back, and you need to attract new talent.” To that end, and pertinent to the region, the group launched ‘A Brilliant Journey of Advance Development Programme’ (ABJAD) in Saudi Arabia, which targeted employees within the kingdom to develop their leadership skills to help them progress across the group’s portfolio of 26 operational hotels in the kingdom, crucial when you consider that Saudi 2030 Vision aims to raise the contribution of the tourism sector to the domestic product to over 10 per cent and provide one million job opportunities.
Elsewhere in the region, the group is growing its Moroccan presence with five properties in the pipeline in addition to the recent opening of four hotels in Al Hoceima, Taghazout Bay and Saïdia. In June, it also signed Radisson Blu Hotel, Amman Galleria Mall which is expected to open next year.
One of the chief trends within the hospitality space accelerated specifically by the pandemic, according to De Neef, is a renewed focus on sustainability. The group has set itself a target to become net zero by 2050. It’s something that, he says, is what the markets and its customers are demanding.
At present, its fanbase includes over 20 million Radisson Rewards members. “We will launch a new programme by the end of the year, where a customer will have much more flexibility in earning and burning points. You have different consumer groups. Some are very focused on earning points, others are focused on obtaining discounts while there are some who only focus on guest experiences. You need to have flexibility in enticing customers into your loyalty programme, but also must realise that there are those who are loyal to your brand but aren’t signed up to your loyalty programme and you have to address that base too.”
Going forward, De Neef doesn’t rule out the creation of further brands under the Radisson Hotel Group umbrella – although upscale and upper-upscale brands such as Radisson, Radisson Blue, Radisson Collection and Radisson Red will be the priority for the GCC.
The chief commercial officer notes that investment in technology will also continue at pace. “We are investing a lot into robotics and AI because that will help us to manage the data – the problem is not getting the data, but making that data actionable. We are building an integrated system from the property management system to the reservation system to the customer relationship management system and content management in order to have a 360-degree understanding of the customer,” says De Neef.
And in a striking revelation as to where its investment in technology will lead, he adds, “What we are now trying to understand is how to leverage the metaverse.”