The path to recovery

Unless you're one of the lucky few to have slipped away to New Zealand or Dubai, the past year has been tough: for social relations, for your wallet and for mental health. That's doubly true, of course, if you've worked in hospitality. With properties shuttered and tourists barred from flying, the hotel market has suffered a pretty incredible slump. Even 12 months on from the start of the pandemic, the numbers are still astonishing. In the UK, the industry collapsed by 87%. Across the Atlantic, US leisure and hospitality shed nearly 500,000 jobs in December 2020 alone. No wonder a recent study by McKinsey found that RevPAR may not return to its pre-pandemic levels until 2023 — or even later.

Yet as populations are vaccinated and infections fall, the sheer depression of the past year is beginning to give way to plans — and, perhaps, hope. Indeed, 2020 has transformed hospitality forever, from the way staff interact with guests to the complexities of contracts and management schemes. To put it another way, though global hotels have spent the past 12 months in a kind of stasis, there's plenty for energetic and ambitious business leaders to think about.

That, at any rate, is the story at Radisson Hotel Group (RHG), which once again is showing how much there is to do even in the midst of a global emergency.

Innovation, empowerment, Simplification

The last time we spoke, Elie Younes was in remarkably good cheer. Sitting out part of the pandemic from his home on the French Riviera, that maybe isn't so surprising. But now the full consequences of Covid-19 — economically, financially and medically — have become clear and Younes is back in Brussels, is RHG's executive vice-president and chief development officer still just as cheery? "Surprisingly, I'm still optimistic," Younes says. "That mindset of optimism is what ultimately influences my and our team's behaviour every day."

For one thing, Younes says, there's the spread of vaccines, which by August may allow us to flock to hotels once more. Then there are the opportunities of battling through such a challenging year as 2020. Though he says he isn't happy working in an atmosphere of lockdowns and travel bans, Younes does concede that recent crisis has pushed him and his team to “stay relevant” in such a challenging economic climate. “You can never be comfortable in these situations – but you can be relentless to overcome adversity.” Glance at what RHG have achieved in 2020 and you’d have to say that they’ve overcome this adversity rather neatly. EMEA saw over 40 signings last year – with 5,000 new rooms and 30 new openings slated for 2021. These numbers would be impressive any year, let alone 2020. So how did Younes and his team manage it? He boils it down to three words: innovation, empowerment, and simplification. “Whatever we do,” he says, “we try to stay relevant to our guests and to our owners.”

Listen to Younes explain his reasoning and it’s clear this is more than mere marketing speak. For RHG, innovation means taking vigorous steps to keep staff and customers safe. The group has perfected a 20-stage cleaning and disinfection regime, known as the Radisson Hotels Safety Protocol, which covers everything from air circulation to sanitation stations. Then there’s empowerment, which gives staff space to make autonomous decisions fast. When it comes to simplification, meanwhile, RHG executives have worked hard to install efficient processes and systems as part of the company’s strategic overhaul. “How can we transform the business and simplify systems and paperwork, and still capture the essence that has been the focus of our five-year plan?” Younes asks rhetorically. “It’s all aimed at making life easier.”

Be an individual

Efficient processes and more frequent cleaning schedules certainly have the makings of a strong post- Covid recovery. But focusing on these details risks deflecting from the more fundamental changes RHG has pushed over the past year. Probably the most interesting shift, appropriately found under Younes’ innovation banner, is the development of a new brand. Known as Radisson Individuals, it brings a number of hotels into the RHG family – but allows them to keep their own styles and idiosyncrasies. Given Younes has already had discussions with over a dozen properties about joining Radisson Individuals, it seems clear that RHG is onto a winner. As he puts it: “It’s a very relevant value proposition to the guests and to the owners.”

Older brands have enjoyed plenty of recent attention too. In the Italian Alps, for instance, there’s Cortina’s Radisson Collection, capitalising on the upcoming 2026 Winter Olympics. Further south, there’s a Radisson RED in Naples, soon to be converted from a historic building in the city’s old quarter. Another RED is also due to open in Newcastle-upon-Tyne. Between these and a host of other properties – from the Palm in Dubai to Santorini and Stuttgart – it’s clear that RHG managed to weather the pandemic remarkably well. All the same, Younes emphasises that these achievements wouldn’t have been possible without the continued loyalty of hotel owners. “Our owners continue to trust our people and our brands,” he says. “We are extremely thankful and grateful for that trust.”

Not that RHG just sat back and expected partners to be loyal for the sake of it. As part of its ethos of simplicity, rather, it’s worked to make contracts more appealing as well as more intelligible. A great case study here is Radisson Individuals. Partner hotels sign up to straightforward pay-for-performance renumeration, without the complicated subclauses and footnotes that can accompany similar agreements.

That’s shadowed by moves elsewhere, with RHG offering support to franchisees struggling to pay fees in the face of continued closures. Another tweak involves integrating the lessons of 2020 into future contracts, giving clear examples of what would happen in the event of another lockdown. The point, summarises Younes, is to create an agreement that everyone is happy with, one where nobody feels compromised.

All the same, it’s testament to the continued robustness of Radisson Hotel Group’s 2018 transformation plan – characterised by cooperation across brands and ambitious growth beyond its European heartland – that its fundamental business model seems unlikely to change much. “I think we’ll probably see an increase in our franchise business, while our management will continue especially in emerging markets,” Younes explains. “As far our lease business is concerned, we’ll see it continue with some adjustments in mature markets to really unlock key strategic opportunities.”

On the rebound

RHG is clearly in a strong position as the world finally reopens. But what about the hotel industry as a whole? Though he thinks that the first half of 2021 may be sluggish, and recovery is unlikely to be equal across borders, Younes argues that a “rebound” is inevitable. “You will see recovery happening everywhere,” he says. “I don’t think many people will remain unvaccinated over the foreseeable future.” Younes believes lower prices will mean new players can easily enter a resurgent market eager for capital. Customers will be eager too: for outstanding hotels in exotic locations after a year of Netflix in bed. There will probably be enthusiasm for less traditional types of accommodation too. Now that we’re all used to living like iPhoneobsessed hermits, Younes suggests luxury apartments may become all the rage. His long experience at RHG certainly makes these predictions worth listening to – but in the end Younes says it’s easier to call him back in another year and talk it over. Given past form, you’d have to guess that Radisson will still be at the top of their game, and Elie Younes as confident as ever.