Carlson Rezidor Hotel Group Struggling

Carlson Cos Inc., the parent company of Carlson Rezidor Hotel Group, is reportedly exploring a merger, partnership or sale of its struggling hotel division. Carlson Rezidor Hotel Group includes Radisson and Country Inns and Suites brands.

Carlson has made no official comment on the rumors, but as Nicole Norfleet reports in the Star Tribune, Carlson Cos Inc. has asked Morgan Stanley for assistance in exploring strategic alternatives. Norfleet adds that the move does not come as a surprise. She quotes HVS Hotel Management President Kirby Payne, who said, “While they’ve made improvements in their brand positioning for Radisson and they have done a lot of good things, it’s hard to keep up with hotel companies that have more capital and more traction and stronger loyalty programs.”

Carlson Rezidor Hotel Group operates more than 1,370 properties around the world. As Bloomberg Business reports, the company currently has 35 hotels under development in sub-Saharan Africa, more than any other brand in that region. In 2014, it had gross room revenue of $4.8 billion.

In North America, however, Carlson Rezidor Hotel Group has struggled to attract and retain a loyal customer base. In J.D. Power and Associate’s 2015 hotel guest customer satisfaction index, its marquee brand, Radisson, placed second to last in the upscale hotel category and ranked below average in customer satisfaction.

Partnership Would Be a Possibility

Last year Marriott International Inc. acquired Starwood Hotels & Resorts Worldwide Inc. in a blockbuster $12.2 billion deal. According to industry insiders, a similar scenario could be in store for Carlson Rezidor Hotel Group. Norfleet quotes Sam Winterbottom, senior managing director in the hotel investment sales group at Newmark Grubb Knight Frank and former executive vice president of development in the Americas for Carlson Hotels Worldwide as saying, “In the age of consolidation, it wouldn’t be surprising.”

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