Carlson Rezidor Hotel Group has announced 37 new management agreements that it expects will build strong momentum for its brands in five markets within Asia Pacific, namely China, India, Indonesia, Thailand and the Philippines (see here).
In an exclusive interview with Business Traveller Asia-Pacific during Hotel Investment Conference Asia Pacific (HICAP) in Hong Kong, Carlson Rezidor president Asia-Pacific Simon Barlow revealed the group’s expansion plans, and long-term focus. Barlow spoke at the Hotel Leaders Panel on Wednesday, joining other prominent hoteliers to exchange views on the latest market issues.
According to Barlow, Carlson Rezidor offers a unique proposition when it comes to establishing new properties. As a privately owned company, he said, the group is not under pressure to deliver quarter-by-quarter results to shareholders and it prefers to look at a “longer-term horizon”. He further explained that what Carlson Rezidor seeks to do is identify a strong partner at each market for a cluster of hotel projects, especially one with a large land bank.
A clear example can be found in the Philippines, where Carlson Rezidor maintains a longstanding relationship with one of the country’s largest conglomerates, SM Hotels and Conventions Corporation.
SM owns 48 shopping malls throughout the archipelago, and according to Barlow, the company often “buys more land than they need.” The excess land provides opportunities to attach these malls to other developments such as convention centres and hotels. This also enables easy sharing of facilities, which lowers overall costs.
"We do not need to build car parks for the hotel which is often expensive, because there's plenty in the convention centres and for the malls," said Barlow.
Together, the partnership has delivered two Carlson Rezidor-branded properties in the country — Park Inn by Radisson Davao in March 2013 (see here) and Radisson Blu Cebu in September 2010 (see here). Just earlier this week, the two parties signed a new hotel development agreement to construct the PHP500 million (US$11.6 million) 150-room Park Inn by Radisson in Clark in Pampanga, expected to open in 2016.
Clark is a fast-developing freeport zone that is located in the province of Pampanga in Central Luzon, 80 kilometres to the north of Manila. It has a catchment area of 17 million people (see here).
Carlson Rezidor’s focus on finding and maintaining strong partnerships is also the primary reason why the group has found markets like Hong Kong and Singapore difficult to break into. Due to the high costs of land in these countries, finding a suitable partner that owns multiple landsites has been a challenge.
However, Barlow did reveal that the group had been close to signing agreements for two hotels in Hong Kong, but ultimately decided against doing so. He is hopeful that with the “increased visibility of the brand’s profile” that a successful deal will be forthcoming in the near future.
The group will also be expanding its presence to Mainland China, with the signing of a management agreement for the development of Radisson Foshan Nanzhuang. Situated near Guangzhou, Foshan is China’s leading producer of ceramics, and this will be a prevalent theme in the design of the new 300-room hotel.
"The partner that we've signed is a joint venture between two local listed companies in the ceramics business, and we feel there is an opportunity with this hotel to use ceramic materials for the external facade of the hotel and the interiors," commented Barlow.
Finally, when asked if there were any plans to establish Park Inn by Radisson properties in China, Barlow stated that the group was actively looking for a suitable partner do so. He also provided an insight about the challenges of bringing the mid-market brand to the country.
According to Barlow: "As you go inland in China, it's still relatively cheap to stay in five-star hotels, and that lowers the price point for the select and limited-service hotels segment."
“[This requires] a balancing of the costs of the land, construction and fit-out of the hotel to the returns that we can generate out of the income,” concluded Barlow.
For more information, visit www.carlsonrezidor.com
Clement Huang
