HNA hotel arm puts Carlson at centre of ambitious global expansion plan
The Chinese conglomerate’s hotel unit plans to raise the number of Carlson hotels by 25 per cent globally in two years.
HNA Hospitality Group, the hotel unit of embattled Chinese conglomerate HNA Group, will make the Carlson Rezidor Hotel Group it acquired a year ago the linchpin of a global expansion plan that includes more than doubling its portfolio in China in five years, according to its chairman Bai Haibo.
The group’s focus on Carlson Rezidor comes as no surprise as it would become HNA Hospitality’s only global hotel asset, after it hired banks to find a buyer for its 29.3 per cent stake in Spain’s NH Hotel Group. Relations with the NH board had soured after a mid-2016 boardroom coup which led to four HNA-appointed board members being kicked out.
Bai declined to comment on the NH debacle, and shifted the discussion to Carlson Rezidor.
HNA will leverage its resources to help Carlson accelerate its expansion in Asia and China. In China, the Minneapolis-based hotel group is not well known, with 22 hotels in operation and under development. HNA said it wanted to more than double that number.
Globally, the expansion covers increasing the number of hotels by 25 per cent and available rooms to over 20,000 from 18,000 by 2020.
The Carlson Rezidor group has more than 1,440 hotels in operation and in development, under various brands that include the Quorvus Collection, various lines of the Radisson label and Country Inns & Suites.
After HNA’s purchase in December 2016, the group underwent a top management reshuffle and opened 73 new hotels around the world in 2017.
“Carlson Rezidor Hotel Group will surely grow better, and faster in the future,” said Bai, who has been with HNA Hospitality for 17 years.
Last May, John Kidd, former president and chief operation officer of HNA Hospitality became the new CEO of Carlson Hotels. Ken Greene, former CEO of Delta Hotels & Resorts, was named president of the Americas for Carlson Hotels.
What HNA would bring to Carlson Rezidor, said Bai, was its extensive existing businesses in operating airlines, airports and travel agencies, as well as hotels under the group. In the pipeline are plans for mutual recognition of loyalty and membership programmes, joint procurement and customer referrals and cross selling among the different business units such as travel agencies and airlines.
“HNA Group is deeply entrenched in the whole tourism chain, from organising travels and tours (agencies), delivering customers to their destinations (airlines), hosting them (hotels and homestays), and even including services such as currency exchange. Various tourism packages can be designed around tourists’ requirements,” Bai said.
Parent HNA Group owns a 25 per cent stake in Hilton Worldwide Holdings. The parent company recently launched HiApp, a digital travel platform that allows users to exchange reward points for benefits available across the group’s business units, such as room upgrades. The programme could be extended to Carlson in the future.
Last year, 30 top managers from HNA Hospitality and Carlson were sent to attend a study programme at Cornell’s School of Hotel Administration, one of the world’s leading hotel management schools.
“They studied and live together, discussing industry topics and at the same time fostering personal friendship. We’d like to do more exchange programmes like this,” Bai said.
“I feel that the foremost important issue is you’ve got to have the right value. If you have the right value, everything else is secondary. There are cultural differences but when it comes to issues like business ethics and hospitality professionalism, we speak the same language,” he said.
He said HNA Hospitality was not only bringing western brands to the East, but also exporting its home-grown Tangla brand to the West.
Bai would not comment on HNA Group’s financing strain, saying it was an issue beyond his level and one for his bosses. The conglomerate is under scrutiny because of its debt-fuelled acquisition spree and ballooning financing costs. Four listed units of the HNA Group have suspended their share trading pending an announcement.