BERLIN — Radisson Hotel Group is competing in crowded European and global markets by perfecting its offer to both guests and owners, rather than accumulating brands.
Elie Younes, executive vice president and global chief development officer at Radisson, said in a video interview the company's strategy involves “simplifying to amplify.” Radisson will continue to offer six or seven hotel brands in most of its major market regions, he added.
“Including Radisson Blu, which is the largest upper-upscale brand in Europe now for 12 consecutive years,” he said during an exclusive interview with Hotel News Now at the International Hotel Investment Forum.
Younes said in late 2023 the company opened the Radisson Blu Hotel at Porsche Design Tower Stuttgart, located alongside owner Bülow AG.
“It is half occupied by Porsche, and half occupied by us, and it is in association with Porsche design,” he said.
While much of the hotel industry is recovered to pre-pandemic levels, Younes said Radisson is looking for ways to perform even better with its hotel portfolio.
“The current trading performance of a hotel today from a revenue perspective is probably 20% ahead of 2019 … in an average European market. [Now], if you are a good operator and know how to manage your [profit-and-loss statement], your [earnings before interest, taxes, depreciation and amortization] is only 15% ahead of 2019 because in between the costs have gone up significantly because not everything is going down," he said.
He said while 15% growth still looks good on paper, the issue is that hotel owner debt is much harder to service.
“Assume an owner had €50 million in debt. In 2019, that owner was paying 1%, and 1% of that €50 million is €500,000. … If the owner was to refinance that asset under today’s climate that €500,000 will easily go to €2 million,” he said.
The mathematics is simple, but the pain can be acute, he said, and every partner in the hotel needs to be closer to one another to see that asset emerge stronger.
“Our job as operators is to try and neutralize that as much as possible,” Younes added.
For more of Younes’ comments, please watch the video embedded above.