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AHIC preview: Kurt Ritter, President & CEO, Rezidor Hotels

AHIC preview: Kurt Ritter, President & CEO, Rezidor Hotels

Kurt Ritter has been at the head of The Rezidor Hotel Group as President & CEO for more than 20 years, making him the longest serving CEO in hospitality worldwide. Under his leadership, Rezidor has become one of the fastest growing hotel companies in the world. Its multi-brand portfolio features five international hotel brands encompassing more than 400 hotels in operation and under development with over 87,000 rooms in 62 countries.

BTN: How do expect the political unrest which has spread from Tunisia and Egypt through to Libya to impact on tourist numbers in key markets across the Middle East in the short term and long term?
KR: I think that the classic leisure/charter destinations in Tunisia (Djerba) and Egypt (Red Sea) will be back to business relatively fast. In Tunisia for example the occupancy in our hotels is currently increasing by 1 percent per day, and the Easter period will push numbers further. The situation will be more challenging in Libya, and we also need to carefully monitor the situation in Bahrain. I don’t dare to make detailed forecasts; our main focus and concern needs to be the safety and security of our guests and employees.

BTN: Have you seen a change in occupancy levels in affected regions?
KR: Yes, of course – we have seen a decrease. But as just explained, numbers are on the way up again.

BTN: What will be the regional impact of Qatar hosting the FIFA World Cup in 2022 and where are the opportunities for hotel investors?
KR: 2022 is still quite far ahead. But I think there will be significant opportunities for investors – not only in Qatar, but also in the greater region since people will plan visits to Dubai, Abu Dhabi and Bahrain. Also the holy cities in Saudi Arabia might benefit from the event. 

BTN: What are your expectations for AHIC 2011? How do you think it will compare to AHIC 2010?
KR: The overall mood will certainly be even more positive. Across almost all regions worldwide, the industry is seeing an upturn and the increasing RevPAR is fuelled by both occupancy and AHR. But I also think that the turmoil in Northern Africa and parts of the Middle East will be discussed and causes concerns since it influences our business a lot.

BTN: Having been at the head of the Rezidor Hotel Group for over 20 years, and as the longest serving CEO in the hotel industry, what advice would like to pass on to hospitality professionals about successfully leading a multi-brand, international hotel group?
KR: No matter how big a group gets or how many brands are included in the portfolio: it is important to remember that the hospitality business is a people business – happy guests, happy employees and happy owners are key, and loyalty is crucial. The hospitality business is also all about service – a good hotelier must enjoy being a good host.

BTN: What has been the surprising developments in the hotel industry that you have witnessed over the past three decades?
If I answer this on a very personal level and with a winking eye: when I was a child, we just installed the first rooms with private bathroom in our hotel – “bed & bath” was the new must-have at that time. Today, it is “bed & bath, TV, free internet, extra service 1, extra service 2, and more” – a great development if I look back at the last 30 years.

BTN: What are some of the key growth areas for Rezidor in the Middle East for 2011-12?
KR: Our business development will focus on markets such as Saudi Arabia, Qatar and the UAE. And despite the current challenging situation, we also believe in Egypt and want to grow our portfolio in this country further. Both our core brands (Radisson Blu and Park Inn by Radisson) are suitable for the Middle East. I see a small advantage for Park Inn by Radisson in some countries since the mid-market segment is relatively new for the Middle East and offers good growth opportunities.

Let me also add that we have identified the Middle East as a focus growth market for our niche product Hotel Missoni. We have opened Hotel Missoni Kuwait in March 2011 and see further potential for this unique brand. People in the Middle East are very receptive towards this kind of new luxury lifestyle hotel.

BTN: What are your predictions for travel and tourism trends in the Middle East over the next five years?
KR: I believe we should analyse the trends in couple of ways:
Outbound: With the increase of flight destinations and low cost carriers the outbound traffic will continue to grow. The demand to new destinations such as Scandinavia, South Africa, South America will grow. The booking trends of the Middle East will come closer to them of the Western World. Online will continue its double digit growth, early bookings will increase, and the travel trade will adapt and increase their technology investments.

Inbound: Abu Dhabi will shift to phase 2 and will also become ready to attract leisure clientele. Religious travel will increase (see the new Saudi Tourism investment plans), and international airport developments will start to show large amount of increase in their Haj and Umrah visits. Qatar will certainly increase their MICE and Corporate activities due to the new Convention Centre and the new projects. Muscat, Dubai and Egypt will still be the leisure hubs of Middle East.

Inter-regional:  Saudi Arabia and Kuwait will continue to hold the large portion of inter-regional leisure and MICE traffic. The UAE will still drive the corporate bookings with regional hubs. And we have also started to see growth on consortia agreements in the region.

BTN: Having had your employment agreement with Rezidor extended for a further three years, what will be your key priorities for the brand?
KR: We will clearly focus on our two core brands, Radisson Blu and Park Inn by Radisson.

With regards to Radisson Blu we are working together with Carlson on a global brand alignment. The Radisson service standards are not yet the same all across the globe (Radisson Blu across Europe, Middle East and Africa represents an upper upscale tier whereas Radisson in the Americas and Asia-Pacific represents an upscale tier) – our aim is to improve the Radisson product outside EMEA and to also increase the share of American and Asian travellers in Radisson Blu hotels within EMEA.

Our mid-market brand Park Inn got the endorser “by Radisson” in 2010; we have combined Park Inn’s impressive growth story (from 0 to more than 140 hotels in seven years only) and Radisson’s great strength and reputation. We also have implemented a new management for Park Inn with Eric De Neef joining us as Senior Vice President Park Inn, and we have launched a new, fresh marketing campaign for the brand in spring 2011 which is presenting Park Inn hotels as hotels you can rely on. All these developments are the basis for a further focus on the brand.

The overall business development focus will further be on young and emerging markets – our main areas will remain Russia/CIS and the African continent where we already play a leading role and see huge opportunities due to improved infrastructures, increasingly stable systems and the lack of internationally branded hotels rooms (respectively the old and dated hotel inventory in many African capital cities).