Radisson Hotel Group is making the case that it understands owner challenges better than the giant publicly held hotel groups, which are asset-light and mostly franchise-driven.

And it says it’s staying focused on revenue for its owners — not rigid rules about how they should run their brands.

“We are very financially driven versus the owner,” said Chema Basterrechea, global president and chief operating officer. “Every time we face a new project, we try to see what brand can best fit their financial interests and return in the future, not just our interests.”

The group, backed by China’s Jin Jiang International, remains quite small compared to Marriott and Hilton. Yet it added a company record of nearly 40,000 guest rooms last year.

Radisson says its properties generate returns 15% to 20% above industry benchmarks, which, if true, is exactly what owners want to hear.

While leased properties represent roughly 10% of Radisson’s over 1,500 hotels in operation and under development, they will generate roughly $1 billion in revenue this year.

“If I’m not a good operator, I will not grow,” said Basterrechea. “The same approach we use with our leased properties, we apply to our managed and franchised hotels.”

Since selling its Americas business to Choice Hotels in 2022, brand marketing efforts appear to be paying off. Radisson’s rewards program has seen membership rise 88% to over 20 million since then.

New Structure and New Brands

Basterrechea, who splits his time between the Brussels headquarters and properties worldwide, has helped to restructure the company around four regional heads to reduce bureaucracy and bring decision-making closer to markets.

“We reorganized to bring more resources closer to where we have the hotels and owners for flexibility,” he said.

Basterrechea emphasized that RHG’s approach to management differs from competitors with larger brand portfolios.

With its mix of 60% franchised, 30% managed, and 10% leased properties, RHG offers a few models from which owners can choose.

Brand Moves

Basterrechea said one of the group’s flagship brands, Radisson Blu, has been the leading “upper-upscale resort brand” in Europe, the Middle East, and Africa for 13 consecutive years.

But owners have wanted more options. So, the company has expanded its portfolio from 6 to 10 brands.

Developers seem to like its so-called soft brands in particular, as witnessed by the rapid growth of Radisson Collection in the “luxury lifestyle” segment, which has grown to nearly 70 properties since its 2018 launch. Recent openings include flagship locations in Rome and Srinagar and upcoming properties in Paris and Madrid.

Basterrechea said RHG responds to owner feedback. For example, the company recently rebranded the midscale lifestyle brand Prizeotel to Prize by Radisson to help with consumer awareness. New properties will open in Gdansk, Poland, and Berlin.

Tech Investment

RHG invests heavily in technology to lower fixed costs and increase flexibility, particularly in emerging markets where labor needs differ significantly from established markets.

“In India, you have a cost per employee of €5,000, whereas in the Nordics, we have a labor cost of more than €100,000,” Basterrechea noted — explaining why the company has developed region-specific operating models.

The company has created its “Club for Revenue Management” to standardize revenue strategies across properties regardless of contract type. This concept, first tested in Radisson’s leased properties, has now expanded to include about 350 hotels (managed, leased, and franchised).

Early signs suggest that consistent practices and computing power can boost the nightly rates hotels command in the market.

The company has also hired tech vendor RobosizeMe to automate key operations in call centers, distribution, and review management.

Jin Jiang’s Ownership

RHG’s Chinese ownership through Jin Jiang — the world’s second-largest hotel group by room count after Marriott — creates potential for capturing outbound Chinese travelers once they travel abroad again at the levels they did pre-pandemic.

The company has identified target hotels in popular destinations for Chinese travelers and created a “Welcome China” program with targeted amenities like tea.

Members of Jin Jiang’s JJ Rewards program can earn points from stays at RHG properties when reserving through the Mandarin-language booking platform WeHotel. However, full integration between Jin Jiang’s and Radisson’s loyalty programs remains in development.

Basterrechea said outbound Chinese travelers remain a future opportunity rather than a current occupancy driver.

In the meantime, Jin Jiang has set ambitious growth targets for Radisson in China, aiming to expand from the current 201 hotels to 1,000 additional properties in the next 3-4 years.

Accommodations Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.

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