Going beyond Blu, Radisson is transforming its brand

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: February 10, 2014 - 10:23 AM

In addition to its upscale Radisson Blu brand, the Carlson hotel division is refurbishing other hotel properties as part of a $1 billion makeover in hopes of returning to the front rank of hotels.

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At the new Radisson Blu at the Mall of America in Bloomington, a lounge in the lobby has swings and a topographic map rug of the area.

Photo: RENÉE JONES SCHNEIDER • , Star Tribune

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When 600 Radisson Hotel franchisees and executives from across the country gather in Bloomington later this month, the message from the Carlson leadership that oversees the 52-year-old chain is expected to be distinctly upbeat.

They will learn that:

• Three-fourths of the chain’s 155 properties have been refurbished and remodeled as part of a $1 billion makeover; the remaining hotels will be done by next year.

• Membership in the hotel’s loyalty program, called Club Carlson, is at 12 million, up from 9 million less than two years ago.

• Occupancy rates are higher.

• Customer satisfaction is up.

• And 22 percent of the chain’s underperforming inventory is out of the system.

“We’re a little bit smaller than we were in 2009 but a much better brand,” said Javier Rosenberg, the chief operating officer of Radisson’s North America division, which is a unit of Minnetonka-based Carlson. “The economy is back, and the industry is noticing our improvements.”

The Radisson conference, which begins Feb. 18, will be held at the Radisson Blu at the Mall of America. The $137 million property, which opened last year, represents the ultimate in Radisson luxury.

Despite those positive trends, the Radisson brand has significant challenges.

The latest ranking by J.D. Power and Associates puts Radisson at eighth among hotels in the “upscale” category in which it competes, up from 11th last year. Radisson still lags behind industry giants Hyatt, Hilton and Sheraton in terms of name recognition and customer satisfaction.

Industry experts also note that Radisson’s national presence is thin in many important markets and that the chain lacks both resort-type and signature properties that can serve as loyalty program rewards.

“They’re trying to get ahead among travelers and developers, but they don’t seem to pass anybody,” said Kirby Payne, president of HVS Hotel Management, a management consulting company founded in Minnesota and now based in Rhode Island. “If you go to Houston, Radisson is way down the list of hotels [sought by consumers]. Same thing in Seattle.”

But with more than $1 billion in scheduled improvements — three-fourths of which is provided by hotel franchisees — and an improving economy, there are positive vibes for the Radisson product, which began in 1962 in downtown Minneapolis under the auspices of Carlson founder Curt Carlson.

Lodging industry recovering

According to a report last month by the consulting firm PricewaterhouseCoopers (PwC), revenue per available room is expected to jump 6 percent in 2014 industrywide.

“With the economic environment improving, U.S. lodging recovery is now on solid footing,” said PwC principal Scott Berman. Occupancy rates this year are expected to reach 63.2 percent, the highest level since 2006, the report said.

Rosenberg agrees with the rosier outlook.

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