Recently, Erwan Garnier, senior director for development in Africa, Radisson Hotel Group, was in Nigeria on a working visit.
Garnier, who frequents the country in recent times because of the growing brand presence and pipeline projects, spoke with Obinna Emelike on the place of Nigeria in Radisson’s expansion target, why the brand is growing faster than others, scheduled openings, challenges, recovery, among other related issues.
Excerpt.
Why is the Radisson brand being embraced more by African, global guests?
There are lots of reasons for that. The first is that Radisson is a brand that has been in the mind of the people for a long time. It was born in the 60s. So, if you look at it, the brand has been in operation and in the eyes of the people for more than 50 years.
So, there is some type of legacy. We have been present in Africa and our first hotel in Africa is Radisson Blu, Cape Town Waterfront. We opened it in 2000.
This is about time and legacy. It is also because we have iconic properties worldwide. Today, Radison has 1500 hotels worldwide and our aim is to provide unique experiences to customers. Based on that we want to create memorable experiences.
The unique experience is a key spirit that we have in the company with a training about it called ‘memorable experience’. What we want is to make sure that the guest has an experience to go away with.
To have a memorable experience, you need to have a unique hotel; something that is out of the norm and you need to make sure that your hotel has a unique location like Radisson Blu Anchorage Hotel Victoria Island, Lagos. There are not many hotels on the Lagoon like this.
Again, you need to have a product that allows you to enhance the local environment; when you go out, you have a drink, you are on the lake, there is music, you have a pool, the gym is facing the water and when you go into the bedroom it is facing the water.
So, the design has been made to create memorable experiences.
Finally, the service is what makes it unique and it is about the people.
When you arrive in a hotel, if you have good service, the people will remember you, the team will remember you and if they don’t know you, they will make sure that you feel welcomed in your stay.
It is just like being happy, being welcoming, smiling, but despite all of that, if you combine the right location with the right product, with the right food and music, right ambiance, clean and comfortable bed, and having service, it makes it a unique experience and people will want to come back.
When they want to come back, they will talk about it and then it creates brand equity. For instance, people love Radisson Blu because they have memorable experiences and they recommend it to others.
In your opinion, is the African hospitality sector recovering faster than predicted by experts?
You need to take into consideration one element. Each African market is different. We have 54 countries in Africa and they react differently and recover differently. But the main element is that we can see fast recovery in economies with domestic markets and slower recovery with economies connected or relying on international markets.
So, if you take the case of Nigeria; it has a very strong domestic market considering the more than 200 million people and being one of the largest economies in Africa.
The reality is that our hotel recovered fast. For instance this hotel, Radisson Blu Anchorage, is full and it is going to be full tomorrow.
The overall performance in 2021 was positive and the reason is simple, it is not relying on the international market, meaning that when we had lockdown and no more travel, people were still staying in the hotel because they were locals.
If you take another market, for instance, South Africa, it is recovering slower because it is relying much more on the international market.
Do you think that lack of funding experienced by investors will delay some of your projects in Nigeria, Africa?
The reality is that if you take Nigeria for instance, there is a challenge with the currency because of devaluation. The reality is that a lot of products in the hotels and materials for construction are being imported and you do not pay in Naira.
The challenge is not specific to the hotel business, but Nigeria as a country because the weak currency is creating an environment that is more challenging to complete construction and opening of hotels. It is creating delays, but the hotels will still open.
As well, 2022 is one of our record years in terms of hotel openings. We have opened five hotels since the beginning of the year and we are planning to open 10 hotels next year in Africa. We are still accelerating, but the reality is that we are being delayed, and the delay is related to funding, which is taking more time, there is more due diligence, and the cost of development is higher because of the situation with raw materials or the access to foreign currency.
How will the challenge impact on your target of 150 hotels by 2025 in Africa?
No, it will not. Overall, if we look at the entire period, we are catching up. We have delays, but our targets remain the same. We are still aiming for 150 hotels by 2025.
Specifically for West and Central Africa, we see the number of hotels being increased by 50 percent. So, we have a total of 28 hotels today that are opened and under development in West and Central Africa. We aim at 45 hotels in the two regions by 2025.
With the delays, do you think your projects will still open on schedule, any new signing?
I foresee a bit of delay in the opening of Nigerian planned hotel projects.
The delays are mainly in getting the materials to the site. It is taking more time to transport them, it is more expensive and it is creating delays. We are talking about a high volume of materials.
So, this is for hotels under construction in Lagos and Abuja. In terms of new signings, we foresee more expansion in Nigeria in Lagos, Abuja, Port Harcourt and in key capital state cities. The ones in the pipeline should open in 2024.
Any plan to rescue cash-trapped partners to ensure opening of hotels on schedule?
Radisson is an operator and not an investor. So, we do not invest in hotels. But we provide support that our owners need to raise adequate funding.
We work a lot with different banks that we partner with in our projects to ensure that funding is there to complete construction.
At the same time, we have a duty to ensure that the project is being optimized by the engineer and ensure that the costing is the right one.
What are the different levels of your operation and offerings in the Nigerian market?
We are hotel operators and we manage hotels. This is our position and mandate. Our aim is to be involved as early as possible into either a hotel that is being built in terms of planning or we take over existing hotels. We have a conversion strategy in order to accelerate the construction or the renovation of hotels.
But at the end of the day, 90 percent of our signings are management contracts because the market is for management contracts.
But from time to time, we have done franchise, very selectively with property owners that have multiple properties for many years and have a strong track record of managing their own hotels. Well, this is an exception, what we are interested in is management contracts.
On our categories of offerings, our aim is to expand all our brands from three-star to five-star in Nigeria.
Park Inn by Radisson is a midscale three-star, Radison is our entry four-star, Radison Red is our four-star upscale lifestyle brand, Radisson Blu is five-star upper scale and finally Radisson Collection is our five-star plus luxury brand.
For the secondary cities, we have Park Inn by Radisson, and our Radisson Red, which is an entry four-star.
We are looking at many secondary cities right now, but we are looking at the right partners with a common vision to make it happen.
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Are the Nigerian guests satisfied with your services?
I think the hotels are always full and if the guests are not satisfied we will not have that good performance. Guests are loyal to a limit, when they are continually satisfied they become loyal. They are loyal because you are providing something that is unique.
In the overall performance, customers are coming back because they have many options in Victoria Island, in Ikeja and other places we operate.
They are coming back because they had good experiences. Overall, we have good customer satisfaction, and good customer feedback.
Moreover, last year we had a financial result from Radisson Blu Anchorage about 90 percent and the same for Radisson Blu Ikeja, which we find satisfying if you compare with the competition. So, based on that, we can assume that the customer is satisfied.
It does not mean that there is no room for improvement and that is why we have a lot of tracking to see where we can improve.
Again, the satisfaction survey that is being done provides us with a lot of feedback on what we need to improve on with the product, service, facilities, cleanliness among others. We have a dedicated team to ensure these are in place.
At what point do you think Radisson will overtake other brands in Africa?
We are already doing that. In the just concluded World Travel Awards that ranked 132 brands, Radisson Blu emerged as the number one in Africa.
Today, we are still the fastest growing brand in Africa, among the many brands here and we see our expansion accelerating and momentum that keeps going.
If you look at the quality of the properties we have in the market when compared with the competition, we feel that it could certainly be improved or get better. If you look at the competition in Lagos, we see ourselves being on the top tier.
We have new products that are coming and we have positioned ourselves as the hotel brand. The Radisson Collection in Victoria Island, in my opinion, is the best in town and in the country.
We are accelerating the opening of Radisson Kudu in Abuja and there are more hotels coming up in Abuja too because we believe that Abuja is a top market and there is a high need for more hotels.
The Collection in Lagos and Kudu Abuja will open in 2024 because of delays and impact of the pandemic.
What strategies are in place to ensure sustenance of Radisson culture across all properties in Nigeria?
It is all about work because you create a culture that you maintain. It is one thing conducting induction and other training, but it is also another thing in maintaining and keeping with your team. If you change an entire team on an ongoing basis, there will be huge turnover, which we do not want because you lose some kind of common spirit.
So, we have employees that are here for many years, this is what creates the tempo for a hotel; to have a common future for the people to stay and enjoy what they are doing. We are trying to give as much support to the team, to train them, and ensure that there is a good relationship internally to ensure that you can have a good relationship with your customers.
It is related because if your employees are not happy, the customers will not be happy.
We have a good management team that ensures that everybody is doing their jobs and also enjoying what they are doing.
Finding the right people for the right position, developing them and making them grow in the hotel or abroad, but keep the spirit, and expand it. This is the secret.
