Carlson plans Canadian expansion

Nancy Johnson and Bob Kleinschmidt talk about Carlson in Canada

ORLANDO, FL – Carlson already has a strong Radisson presence in Canada with 21 hotels including beautiful properties in Vancouver, downtown Winnipeg and other Canadian cities. But there are still opportunities in Quebec, and room to grow the brand in Toronto.

“We are taking a particular look at Vancouver and Edmonton for opportunities,” as well, Nancy Johnson EVP and chief development officer, at the Carlson Hotels annual convention held in Orlando March 3-5.

“We can grow that by at least 10-15 per cent,” which translates into three or four Radissons over the next several years, she added.

At the convention, there was a great deal of talk about “bifurcation”, or the distinction to be made between the upper upscale Radisson Blu and the upscale Radisson designation. While hotels in other parts of the world, most notably Europe, have received the Blu designation, there are currently no Blu hotels in North America. During a slide presentation showing flagship Radisson hotels around the world, the Vancouver Airport Radisson was mentioned, but there are no immediate plans to brand any current Canadian hotels as Blu.

“To begin with, Blu’s flagship properties [in North America] will be new properties which we will manage,” said Gordon McKinnon, Carlson’s executive vice president and chief branding officer told CLN. But he added that there could be Blu hotels operating in Canadian markets that are able to sustain this type of hotel. And with 21 Radissons, Canada certainly hasn’t reached saturation, he noted.

He described Radisson as a international brand that could embrace local aspects, but which has to meet consistent standards globally. “At this level, the days of cookie cutter hotels dropping from the sky are gone.”

“Every property in the U.S. and Canada has a property improvement plan,” said Johnson when asked how the changes to the Carlson brands will be implemented.

“We are in the process of negotiating with each owner what is required. For example, the Regina Radisson is a lovely, historic property. We want to put in the iconic touches of the new Radisson. We already have that experience with beautiful older buildings in Paris and Vienna. Those are the types of conversations that are going on right now,” Johnson said.

Country Inns & Suites started in Canada 18 years ago, and there are now 14 hotels across the country. “We actually started in Canada with a strong partner,” said Johnson. “We need to quantum leap that growth, from 14 to 20,” she said, adding that Country Inns & Suites is suitable for a lot more of Canada’s smaller centres.

While Canada now has four Park Inns, in downtown Vancouver, St. Laurent, QC, Miramichi, NB and Alliston, ON, Johnson expects that number will rise by six to 10 units because it is such an economical, competitive operation. Earlier in the conference, Jacques Dubois had told delegates that essential Park Inn conversions could be made for as little as $1,000 per room.

“Park Inns are a European success story,” McKinnon said. “From a investment point of view, they were developed specifically to convert existing buildings easily,” although they can also be new-build properties. He noted that although Park Inns were relaunched back in 2003, and the concept has evolved a little since then, “it is as fresh today as it was back then.”

“Park Inns are brighter and more contemporary [than their competitive set]. It’s the paint, the lighting, the attention to quirky, fun details. It’s a brand that speaks today to contemporary travellers. Many hotels are old and tired and play it safe, to the point where they become a plain, vanilla box,” she added.

A departure from ho-hum beige, Park Inns could have a bright future in Canada.

“The identity has allowed us to bring branding into the 3rd zone, the area where you begin to infringe on people’s private space through branding,” said McKinnon. “You can create a sense of identity without slapping a logo everywhere.” He gave the example of using the brand’s four bright colours in the room – having a red wall with blue accessories. That’s branding, but it’s not obvious.

Another innovation is the bar-reception area blend, where the reception area doubles as a bar during certain times of the day.

Scaleability is another major advantage. In Europe, Park Inns range in size from the 1,200 room property in St. Petersburg and the 1,012-room hotel in Berlin, to properties as small as one in Belgium with 40-odd rooms.

“With Park Inns we have a 12 to 18 month window with the economic situation. Mortgage holders or buyers say, ‘I can upgrade this property to a new, bright, fresh look to augment ROI,’” Johnson said.

Some of the Canadian Park Inns have already picked up on the synergistic relationship with Europe, because of the connection their global customers have, identifying with Park Inns in London, Paris and Berlin, Johnson noted.

While Carlson is a franchise company and will always be, they are also becoming more interested in management contracts, and are clearly looking for management deals, noted Bob Kleinschmidt, EVP of development and investments at Carlson Hotels Worldwide.

“We will provide key money for the right deals and the same investment will be made to get the management contract. With Country Inns, in a cluster development, we would manage the hotels, but there would have to be 100+ rooms. Otherwise we are looking at strategic partners and franchising.”

Over the next 18 months, Carlson is looking to focus on stronger development personnel in Canada. “We have an excellent support system from an operations standpoint, but we need more from a development standpoint.” On the operations side, Charmain Stoyand is the regional director of operations for Radisson Canada, and Sandy Russell is the senior regional director of sales and marketing.

“We love Canada. Our Canadian partners are among our most enthusiastic,” Johnson said, adding that three Canadians sit on the Radisson Franchise Advisory Council, and two on the Country Inns & Suites Advisory Council.

“We see big growth areas, particularly with Country Inns,” said McKinnon. “Country Inns is a brand misfit in certain areas of the U.S., but in Canada it is a natural fit.”