Carlson freshens portfolio with 2 new brands
MINNEAPOLIS—Carlson Rezidor Hotel Group has identified what executives called two “white spaces” in their portfolio of brands and hope to fill those gaps with the launch of two new brands: the Quorvus Collection and Radisson Red.
The company announced the brands at its annual business conference for full-service brands, held at the Radisson Blu Mall of America in Minneapolis.
Quorvus Collection will be a soft brand for independent, modern luxury hotels that can keep their identity yet join Carlson Rezidor’s distribution system. Radisson Red will fit among a growing segment of upscale hotel brands that have limited food-and-beverage and meeting space.
Before the announcement, Carlson Rezidor counted five brands in its portfolio: Radisson Blu, Radisson, Park Plaza, Park Inn by Radisson and Country Inns & Suites by Carlson. The company hasn’t launched a brand from scratch since Country Inns & Suites in the 1980s. A former master license agreement with Italian fashion house Missoni was terminated at the end of 2013.
“We’ve taken Blu globally, introduced Country generation 4, re-imagined Radisson and introduced the next generation of Park Inn. So we thought ‘what might be next?’” said Gordon McKinnon, executive VP and chief branding officer for Carlson. “These two brands will be focused on new, emerging trends.”
McKinnon said Carlson Rezidor has been discussing both brands for several years but only in the last six to seven months have they really gained momentum. Because of the size and scope, Radisson Red made the bigger splash among attendees, with a handful of the approximately 600 audience members audibly gasping when the logo was introduced on screen.
Carlson Rezidor is developing a version of Radisson Red for the United States market and another for the Europe, Middle East and Africa market. The company has earmarked $50 million to use as equity in helping developers get the first few hotels open. The brand will be a mix of new construction and converted hotels, McKinnon said.
He described Radisson Red as a third tier of the Radisson brand family, fitting just below the full-service Radisson because of its limited amenities. Tiering brands is natural in other industries, such as fashion or drinks, he said, and helps individual brands obtain a louder, collective voice.
He said Radisson Red will target millennials, which are “no longer a niche segment.”
“We’re introducing almost a new segment to the market, which is lifestyle select,” McKinnon said, adding the brand will compete with Aloft, Hotel Indigo, Hyatt Place, Tryp by Wyndham and Element Hotels.
Camilo Medina, director of the Nulife development firm, who is building a Radisson in Santa Cruz, Bolivia, said the Radisson Red concept is “very exciting.”
“Especially with the younger client who is tech-oriented and doesn’t appreciate some of the traditional hotels offer like concierge or roomservice and appreciates having the independence to manage his own stay.
“I think it’s exciting and it’s forward looking.”
McKinnon said Radisson Red was developed with the consumer top of mind but that development costs were kept in line as well. The model was drawn up to fit on a 2-acre plot of land and will feature about 150 keys. F&B will be kept to a limited menu.
Jasminder Singh, chairman and CEO of the Edwardian Group, a hotel development firm based in London, said he was pleased to see Carlson Rezidor kept operating and development margins in mind when building the prototype.
“It’s a new way of thinking,” he said. “The economic model needs to be strong and efficient but can’t become a sweatshop for employees. The balance has got to be right, and of course the voice of the customer cannot be forgotten.”
Singh said Carlson Rezidor faced “lots of legacy issues” with its aging brand portfolio and “this freshness is very uplifting.”
Just as the limited-service segment is evolving to meet changing customer demographics, so too is the luxury segment, McKinnon said. He described Quorvus Collection as a group of “individual hotels who understand modern luxury.”
The name Quorvus has its roots in classical language, he said, and is a derivative of a name of a constellation “where five of the brightest stars light the way.”
McKinnon said Carlson Rezidor “started thinking about (Quorvus) as a soft brand but it had to take on much more definition, much more meaning.”
“We are not going to impose standards on them but we will layer on top some 5-star prerequisites,” he said.
McKinnon said Quorvus will launch in the third quarter of 2014 and there are three or four hotels already lined up to join. The primary focus for the early hotels will be in Europe, the Middle East, Africa and Asia, he said.
Iype Abraham, commercial development director for the Edwardian Group, said he liked Quorvus’s tagline, which is “transforming luxury.”
“Clearly there is a whole new group of people from emerging markets more accessible to the luxury space at the moment,” he said. “Their aspirations and requirements are quite different than traditional luxury. It’s not about the old way of luxury. Today’s travelers want something different; they’re aspirational and they know what they want. It’s relaxing; it’s more lifestyle.”
Abraham said he needs to study further the value proposition for Quorvus Collection.
“We are in London and we have a lot of traffic,” he said. “But at the end of the day it requires a lot of traction for that. If you can attract a lot of hotels to come onboard then definitely that traction will be there.”