LATTE speaks with Andreas Flaig, Executive President Development for Asia Pacific, Carlson Rezidor Hotel Group, about the new future for Carlson Rezidor, the growth of Radisson RED for “millennial-minded” travellers and virtual reality.
- Tell us about your role within Carlson Rezidor Hotel Group.
I’m responsible for the growth of our company through management agreements and franchise agreements in Asia Pacific. I have different teams throughout the region working with me, including a gentleman called Barry Fleischmann who is Director of Development for Australasia, based in Sydney, who is responsible for strategically moving forward in Australia, and build long and lasting relationships with investors and developers in the region.
- How did you get your start in hotels, and what attracted you to the hotel industry initially?
I started in the hotel industry when I was around 17. When I was still in high school I had the opportunity to do an internship at a hotel in South Africa, and it allowed me to experience firsthand what it would be like to work at a hotel. I had the fortune of having travelled a fair amount during my youth and have stayed at many very interesting and exciting hotels, and that made me interested in understanding what it would be like not to stay there as a guest, but what happens behind the scenes. Then I was able to find a great university in the US. I went to the Cornell University School of Hotel Administration and the rest is history.
- Is that what still interests you about the hotel industry now, going behind the scenes?
Absolutely. I’ve been very fortunate over the last 25 years to have always stayed in the hotel industry, but working in different fields. Initially I worked for Mandarin Oriental Hotel Group in operations. I then moved into the hotel consulting world, and I worked for Arthur Andersen which gave me a completely different view, a lot more focused around how people invest in hotels, how owners look at hotels, and the financial and feasibility side of the business. I moved on to work for a bank to lend money to people who wanted to build a hotel. I then went back to an advisory firm, selling hotels and advising clients in purchasing hotels and hotel companies. Now the circle closes in the sense that now I’m back working for an operating company in the field of development which encompasses a lot of what I’ve experienced over the last 25 years. Development is a field where understanding of real estate, of markets, of why people invest in hotels – what they expect from an operator like us, what they expect from our brand – all of that plays an integral part in how we partner with developers and investors, for the growth of our company. In a sense, all of what I’ve done before was a perfect training ground, if I may say so colloquially, for what I’m doing now.
- We heard last fortnight that HNA Tourism Group has said that it would acquire all of Carlson Hotels, and with it a 51.3 per cent stake in Rezidor Hotel Group [pending regulatory approvals, mandatory public tender offers and closing conditions]. What does that mean for the future of hotel brands such as Radisson Blu?
Yes that is correct, it is intended to close by the fourth quarter of this calendar 2016. I think it’s very exciting news for us. It means that, under the new ownership, we are looking to accelerate the growth of our brand, including such exciting brands as Radisson RED which is our lifestyle brand that we launched at the end of 2014. I think we’re looking to accelerate in the digital space, which is going to be critical in terms of how we interact with our guests.
It also includes us being able to invest in key locations and investing in hotels ourselves to widen our distribution and increase our presence in the major cities around the world. Our business model will expand so that’s great news all around. Now obviously the transaction hasn’t closed yet, and all the finer details will need to be worked through in the coming weeks and months as you would expect.
It’s very much business as usual at this stage and our global CEO David Berg will continue in his role. The fact that the new owner is based in China – that it is a Chinese company that has a multitude of travel and tourism businesses, including owning Hainan Airlines – means that we will be able to increase our exposure in the Chinese market. As a hotel company that is a very important market, not only because we want to continue to grow, but we also want to make sure we get our fair share of the outbound market from China into the rest of the world, including Australia. This has grown dramatically, and so that relationship with our new owners and their businesses will help us greatly.
- Carlson Rezidor is well on track to attaining its goal of adding 100 properties in the region to the portfolio by 2020 then?
Yes, exactly! We have plans in Australasia to increase our portfolio to 20, and as you rightly say we are looking in Asia Pacific as a whole to increase from 109 to 200. We’re well on track to reach that, through organic growth and the speed that we are signing new hotels. I think we certainly are especially encouraged by how our Radisson RED brand is resonating in the market. We opened our first hotel globally in Brussels just three weeks ago. Now people are able to see it and experience it and touch it and feel it. More excitingly and closer to home, we’ve been able to sign five Radisson REDs in Asia Pacific, two which will be in China, two in Indonesia and one in India. We are working very hard to bring this brand to Australia, and I’d like to see it in Auckland as well. We are in serious discussion with people in Sydney, Melbourne and Perth to bring Radisson RED into this part of the world.
If you look at the growth engine of the world in terms of travel and tourism, it is clearly Asia Pacific. Both [India and China] are growing rapidly and we’re seeing a tremendous amount of interregional travel in Asia. In fact, interregional travel in Asia is outpacing by far any long-haul international business. That bodes well from a growth perspective; if you look at the supply pipeline of where most of the hotels in the world are built, it is Asia Pacific. I’m also very bullish about Australasia, because not only have we seen a huge increase of Chinese travellers come to the country over the last three years or so, but generally international arrivals into Australia have increased last year by nine percent. Domestic travel, I think partially due to the Aussie dollar, has also increased by seven percent. That brings about a lot of opportunities, not only in the capital cities of Australia, but also in the regional markets where the hotel products may be quite outdated, maybe not quite up to the standards they need to be to attract new domestic travellers, let alone the international traveller who comes to expect certain things from their stay in Australia and obviously from a hotel.
- Can you tell us about the virtual reality (VR) technology that you introduced for the BluPrint design programme?
Yes, this is another great platform and a way to, on the one hand, work with our partners and help them to visualise what our brand stands for early on in the process. At the moment my team is using that technology in meetings with developers and investors to tell them what our five-star Radisson Blu brand is all about, especially our new updated design called BluPrints. It’s something that can be conveyed a lot more vividly through VR and with a lot more entertainment and reality [compared with] brochures or other means. I think eventually you will see the technology can also be used at property, when people want to plan their wedding or a major meeting or event at one of our hotels. [Experiencing it] through VR gives them a much better sense of what they can expect once they are at our property. And it really helps to encourage them to feel comfortable, and that they are making the right decision and that they are making the right decision by choosing us. And especially when you have multiple brands like us – we own seven brands – and we always want to make sure that people very easily and very quickly understand the nuances of our brands.
- How important do you think technology is for the guest experience?
I think it’s increasingly more important every day. When you look at our Radisson RED brand, it tries to very much to embrace its location, by bringing art and music into the hotel and making it relevant for the local market. But second pillar of DNA for our Radisson RED brand is to make sure that – for the very fast-growing market of the millennial traveller who wants to stay connected at all times – the technology is not just there or that it’s complimentary – as Wi-Fi is with Radisson RED – but it’s at a very fast speed and it’s available anywhere. Whether you’re having your coffee in one of our lounges, or whether you’re in your room or on the treadmill in the gym, you have to make that type of technology available. With smart phones, people like to watch and stream their music and their movies onto the TV, and that technology we will also have in the Radisson RED. Travellers come to expect that: that it’s seamless, that it’s fast and that it’s available and complimentary everywhere. [This complements the] design appeal to what we call a millennial-minded traveller because we don’t like to categorise our guests by age. It’s much more about what kind of traveller are you, what kind of expectations you have of your hotel experience. With Radisson RED we are appealing to that audience.
- How have you seen the travel industry change, and how has Carlson Rezidor managed to stay ahead of the changes?
On the distribution and information technology front a lot of things have happened, and on the branding side as well. We have seen more and more niche brands come about to serve increasing numbers of different tastes around the world. I think we will continue to see more and more consolidation. I think that primarily has to do with the fact that the investment required to stay current with technology, to increase the presence and distribution around the world, is very important. The way we stay in touch and communicate with our guests is also very important and requires a lot of capital and investment. So we think we are extremely well positioned, especially under our new ownership and the closing of the new transaction to be able to stay ahead of the curve and ultimately accelerate our growth and become a much larger player going forward and be in all the strategic locations where our guests would like to be.
- Which luxury Carlson Rezidor properties or developments are you most looking forward to?
Like I said I’m very excited about launching our Radisson RED brand in Asia Pacific; we’re also due to open in Cape Town very soon … and it is very exciting to see a new brand come into operation. Other than that, we are looking to continue to grow with Radisson Blu as well; we would like to grow that brand into Melbourne and Perth as well. We think the Sydney property is doing fantastically and it’s a great hotel for us.
- So a more personal question: where do you go to recharge?
That is a very personal question! I like Bali as a place to recharge because it’s not far from Singapore where I’m based. But to be honest, one of the most outstanding stays I’ve had very recently was only four weeks ago when I happened to spend a weekend in Perth and Margaret River. And I have to say it was the most outstanding week I’ve had in a very long time. I was extremely pleased with my experience in Perth [at the new COMO The Treasury]. The food, the wine, the service level was outstanding. The highlight for me was Margaret River. I love wine, I collect wine and to be able to visit some very famous wineries and some not-so-famous ones but with incredible wine that are soon to become famous. Also looking at the beaches you have along the West Coast, it was very stunning and I’m sure to be back. I travelled with family and we rented a home in a place called Yallingup in the northern part of Margaret River. A combination of staying at a hotel and then staying at a house that was close to the beach to allow us to have a different kind of experience all together as a family.
- Which destinations are still on your bucket list?
Bhutan is one. I would say Hawaii is another and I would say probably Tibet as well, a little bit closer to home. Those would be three on my immediate bucket list.
- What’s the best coffee you’ve ever had?
The best coffee I ever had was in Singapore, and it was a coffee brand called Dimbulah. I’m not sure whether they’re in other places, but that’s certainly where I’ve had the best coffee. When I’m not travelling and am in Singapore, then I do enjoy that on a daily basis.