The scene is pure Asian business. Simon Barlow, President Asia Pacific of Carlson Rezidor, sits in the bustling business lounge at the InterContinental in Kowloon. Framed by spectacular views of Hong Kong Island, packed with suits attending the HICAP hotel investment conference, it feels like there are opportunities everywhere.
And opportunity is very much the message from Mr Barlow, who, despite some short-term challenges, is relentlessly positive about his company’s future in the region, where it is already operating 100 hotels across India, China, Indonesia, Philippines and Thailand with another 70 in the pipeline.
He says AP is a crucial element of Carlson Rezidor’s aggressive growth plans – which involved increasing its total hotel portfolio from 1350 to 1500 properties by 2015.
India has been the main focus so far. “We have 60 hotels in India and a strong pipeline going to come from there,” he said.
“A lot of hotel companies make big promises about growth but can’t deliver. But we have consistently done what we promised in India.”
All Carlson’s our staff in India are Indian, he said, and “we know how to do business in India”.
Unfortunately the Indian market is going through a soft patch, although at Carlson’s 21 Delhi hotels occupancy was up 5% for the year to the end of August.
Elsewhere, however, revenue per available room fell 3%. He said the market is partly stymied by the 2014 election, before which “in historical terms no decisions get made”.
Mr Barlow said Carlson is “expecting continuing turbulence over the next 12 months in India” but plans to open eight new hotels and sign up a further dozen or so there next year.
Why? Because it believes strongly in India’s long term potential and isn’t too concerned about short-term trends with the long game in mind.
“There are just 960,000 branded hotel rooms in India – long-term its very positive,” Mr Barlow said.
China is the other big Asian pond Carlson is playing in.
They have 13 operating hotels in China and a further 21 in the pipeline. The major markets are weak with over-supply hurting Shanghai and Beijing, the two places everybody wants to be.
However, most of the development is being channelled into Western China in a move orchestrated by the Chinese government.
Meanwhile, “it’s been tough this year” with the Chinese government curbing spending to cool the economy, a move that’s had a significant impact on spend hotel F & B spend, a crucial part of the revenue mix.
Five-star Radisson Blu is the brand Carlson Rezidor has chosen to be its Asian flagship with 50% of all regional hotels and 50% of the pipeline bearing the marque.
“We chose the Radisson brand to go to market in Asia because it’s a strong brand in Europe which offered us the strongest branding in Asian countries.
And because it’s a five-star brand, the rates and revenue it generates are much better than Carlson’s Rezidor’s other hotel brands: Radisson, Park Inn by Radisson and Country Inns and Suites by Carlson.
“The reason we haven’t come here with Park Inn (three-star) is because we don’t believe the Chinese market is mature enough to sustain low-service hotels. rates are too low”
On the distribution front, Mr Barlow said 35% of Carlson’s business came through Online Travel Agents for the year ending August 31.
“We like OTAs,” he said. “I don’t know why some players in the industry are so against OTAs.”
He added that the Carlson branded website has performing well but is due for a revamp.
“Having seen 35% growth on our own website we are in the process of overhauling our web strategy.”
He said in a strategic switch there’ll be one web portal for all the brands rather just standalone sites.
Discussing sales and marketing, Mr Barlow said “I have a very simple philosophy – it’s almost like water running down a hill and finding the path of least resistance.”
On a more practical note Mr Barlow said his sales motivation was driven by the perishable nature of hotel rooms, a unsold hotel room is an opportunity lost forever.
Does that mean rate doesn’t matter? “No,” he said.