Garnier: Radisson Group Has Clear Expansion Plan for Nigeria, Africa
The Radisson Hotel Group’s Senior Director, Development-Africa, Mr. Erwan Garnier speaks with Dike Onwuamaeze about the Group’s expansion plan and future of hotel business in Nigeria and Africa. Excerpts:
Give us an overview of the pace of recovery of the hospitality industry after the COVID-19 disruption?
The hospitality business, and hotel business specifically, has been highly impacted by COVID-19. It is one of the industries, along with the airline business that have been the most impacted because of the travel restriction and lockdown. Now, if you focus more into the African continent you can see that the continent and the hospitality business are fairly resilient. We are seeing faster recovery than expected. During the COVID, we were among the hotels that had their occupancy rate going from 80 per cent to really low percentages. So, it was economically speaking very dramatic. But the picture today is that all our hotels have re-opened in Africa. To give an idea, Radisson has worldwide 1,500 hotels. We are owned by a company called Jing Jeng, which has 5,500 hotels. So, today we are the number one hotel operator globally. And to answer your question, the pace of recovery has been better than expected and today we are back on track in our performance in 2022.
How devastating was the COVID blow on hotel businesses and Radisson’s strategy that enabled it to remain afloat and still thriving?
During COVID the result was devastating. We were trying to maintain minimum service to cover the basic costs. So, we were not talking about profits. In fact we were losing money as a company and we looked for support from our main shareholders to keep the company afloat. So, COVID was terrible for the group. But now looking forward, the whole performances of the hotel are doing well. Overall, as I have said before, we are back on track.
Has your room occupancy rate come up to 100 per cent?
This hotel (Radisson Blu Ozumba Mbadiwe) is full today (October 21). Hundred per cent and yesterday it was full as well. This shows that we are doing very well. To give you an idea, our hotels in Nigeria in 2021 had around 85 per cent occupancy rate. So, we can see it is a very good performance.
What is the Radisson’s African growth strategy all about?
Very simple, our strategy is that we want to increase the number of hotels we have in Africa to 150 hotels by 2025. Today we have 100 hotels that in operation or are being developed. Specifically, in West and Central Africa, which includes Nigeria, our strategy is to grow our portfolio by 50 per cent. In West and Central Africa, we have 28 hotels and we want to have 45 hotels by 2025. In Nigeria today we have eight hotels in operation or in development and we are planning to have at least 12 to 14 hotels by 2025. Our growth is that we have hotels from three star to five star. So, we have upper mid-scale three-star brand. Then we have Radisson three-four-star brand upscale; then we have Radisson Red, which is four-star upscale lifestyle brand; then we have Radisson Blu, which is upper upscale brand five star and then we have Radisson Collection, which is five star plus luxury brand. We see all these brands being present in Nigeria. We focus on Lagos, Abuja and Port Harcourt and selectively in some state capitals’ cities as Radisson’s brand extends into the secondary market. We are looking at expanding in the business segment such as business hotel, service apartment, resorts and suites. There are different kinds of positioning you can have with the same brand depending on the market demand and supply of the competition.
What is your strategy and future investment plan in Nigeria?
Our future investment plan is to have a structure that would support the operations of our hotels. So, we invest in our deliverables in order to ensure that the hotel performs in the market. So we have a lot of investments being made in our brand, in our IT facilities in order to be competitive. The investment is in the overall performance because we do not invest in the hotel specifically because every single project is being owned by a third party or our partners that will invest in them. So, Radisson itself invests in the whole structure in order to accelerate the performance of our hotels, which means sales, marketing, media management, PR, these are where we invest in our brands and all deliverables all around it.
What is the future of hotel business in Nigeria?
The future of hotel business in Nigeria, I think, is moving into more sophistication, meaning that there will be more brands coming and more competition coming because customers are driving the future of the business and they want quality for their money. And quality means more security, more quality of product, more experience, more service and overall we can see that more brands are coming into the market. We will see acceleration in these areas that I have mentioned with lots of brands. It is slow in coming and will take time but it is coming.
What are the creative or innovative packages Radisson intends to introduce that will be a game changer in hotel business in Nigeria?
We innovative by making sure that the product we have is something that does not exist. If you look at when this hotel (Radisson Blu (Ozumba Mbadiwe) opened in 2011, this positioning of the hotel does not exist then. So, this hotel has been successful after a decade and we see that it is still a leading hotel in Lagos. And the performance that is happening is because it is still being innovative in its positioning. And the reason is simple: most of the hotels that we see in Lagos are either business or some type of leisure. But it is not what we call an urban resort. This is being innovative by having product that is unique in the market and creating some kind of innovation. It is being able to supply services and experience to business customers because we have corporate business coming here. We also have meetings and events businesses for those lodging and using the meeting and event facilities and at the same time you have leisure business coming into the hotel because of the location. We are still being innovative by ensuring that we are able to tap into different markets segments with the same product. And these are reasons our own hotels are being so successful.
Why is 2022 a historic year for the Radisson hotels?
Very simple, 2022 is the only year we opened more hotels than we signed hotels, which shows that in fact we are materialising our pipeline. You know a lot of hotel groups had a lot of signing, which is good. But the materialisation is the most challenging and frankly speaking Nigeria is one of the most challenging markets in Africa in terms of cost of development, in terms of quality of the professionalism, in term of time to market. The record event for Radisson in 2022 is that we opened more hotels than we signed. Normally, we signed more hotels than we opened. There are multiple of reasons this happened. One, this is a result of our strategy of pushing for existing hotels to take over instead of waiting for four or five years to build a hotel. It takes six months to convert an existing hotel to our standard and open it. Two, we have a technical team that is very experienced and is providing the right support to ensure that the hotel is opened in a fast tracked pace. Three, this is a consequence of COVID. We delayed opening from 2020 to 2021. All of that combined to make 2022 a record year in opening hotels.
What is the contribution of your Nigerian operations to Radisson’s Group African market?
It is roughly 10 per cent. We have around eight hotels opening or in development in Nigeria while we have 100 hotels in development or opening in Africa.
What are your future expansion plans in Nigeria and Africa in general?
In Africa the vision is to have 150 hotels by 2025. We have a very clear vision for our expansion plan. Now, if you focus in West and Central Africa, we have identified 80 cities where we are going to expand and focus our expansion plan on. The priorities for us are Abuja, Lagos, Abidjan, Dakar, Kinshasa, Duala and Yaoundé. These are the key cities where we will expand in West and Central Africa. Focus for Nigeria obviously and as I have said earlier is Abuja is our priority and then Lagos and Port Harcourt and few capital cities in some states.
I want you clarify your earlier assertion that Nigeria is your most challenging markets in Africa?
It is one of the most challenging markets because of the devaluation of the local currency which is the main challenge that we are facing.
So, what does the future holds for Radisson’s operations in Nigeria and the rest of Africa?
We see a future that is bright and expanding.
What are the Radisson’s unique selling propositions and its method of rewarding guests’ loyalty?
We are very owner driven. Today we have the fastest growing hotels in the continent and the reason is that we are providing more hands on solutions, which is very owners’ centric with focus on clients’ satisfaction, which is also owners’ satisfaction that allows us to have faster and more viable business.
What are your environmental sustainability plans in terms of managing wastes and consuming water and energy?
It is part of our five-year plan to go net zero in the coming years and manage energy and waste in a very sustainable way. Originally the Radisson is from the Nordics where sustainability is extremely important. This is part of our dashboard to ensure that all the energies are being managed and saved in a sustainable way by our own management team in every aspect of the business.
What about your corporate social responsibility?
Our CSR’s business activities across communities in Nigeria include food bank donation to the less privileged in our communities. There is also ongoing partnership of all our hotels in Nigeria with the SOS Children’s Village Global Foundation’s for monthly monetary donations to the foundation via placement of donation boxes in every hotel, wherein our guests can put in their contributions for the foundation. In addition, quarterly donation of clothes, groceries, household supplies and books are made to the foundation. Other responsible business activities within our communities include, voluntary clean up and beautification activities in promoting environment friendly and litter free communities. The most recent of this activity was carried out two weeks ago in the Ikeja GRA community. We also hold awareness talks across our hotels on health and wellness, cancer awareness, mental health etc.
