Radisson Hotel Group Americas CEO On Making “Difficult” Decisions

How does a major hotel chain handle the delta variant? I met with Jim Alderman, chief executive officer for Radisson Hotel Group Americas, to talk about how hotels are coping with the latest COVID surge — and what comes after it.

You joined  Radisson Hotel Group Americas at the height of the pandemic. What was that like? 

It was surreal. I had been aware of the potential for such a global phenomenon and had even personally prepared my family for it for years. However, at the time it felt far more likely to be temporary. 

We believed it was something we could manage through in a matter of weeks or potentially a few short months. Those ideas quickly eroded into hotel triage from managing outbreaks at our facilities to closing the corporate offices.  

So what did you do?

We enacted almost 50 individual measures to ease the burden on our owners. I was fortunate to have a great team in place and the support from the rest of our organization.  

We made the difficult decisions every hotel company had to make with respect to furloughs and other drastic measures in order to preserve the organization. However, the one place we did not reduce any people whatsoever was in our regional franchise relations team. Our franchisee partners needed the support to be there, so we made sure our people were there.

How the delta variant has affected hotels

How has the delta variant affected Radisson?  

It was as bad for us throughout the world as it was for other hoteliers. Specifically in the Americas, we did fare better with our portfolio than others as we have our largest concentration of assets in midscale select-service with Country Inn & Suites by Radisson.  

We were able to gain market share during the pandemic as most of our hotels have a suburban, interstate, and smaller town focus, which was still serving the needs of necessary leisure travel. So relative to our competitive set in those markets, we grew share. Overall, this has been as difficult on the hotel industry as anyone.  

Our owners are largely owner-operators. We are not replete with center city or convention center assets at Radisson in the Americas. These types of assets were dealt the hardest blow by the pandemic.

Radisson may adopt daily room cleaning fee

How has the hotel experience changed during COVID-19? How is it better — and where is there room for improvement?

I believe it is a bit early to put the permanent changes on stone tablets, especially as we figure out how to deal with the variants of COVID-19. Of course, rooms need to be cleaned upon checkout. It is entirely possible the daily cleaning might come with a surcharge for guests in the future. It is entirely possible the daily cleaning might come with a surcharge for guests in the future. 

Wait — a charge for daily room cleaning? How much would you charge? 

Hilton is charging $10. If we charge it would be about the same. We haven’t decided. 

How about the breakfasts that are included with your stay?

The free breakfasts at select-service properties have returned, and there is widespread inconsistency at this point for many reasons including labor shortages and supply chain issues. I think the cleanliness and advanced protocols were a place where every brand got into highly functional partnerships with vendors to respond to the pandemic and clean the rooms and common areas in a way that inspires confidence with guests.

How staffing shortages have affected hotel guests

How has the staffing shortage affected you?

It has affected us along with the entire industry. It is a continuing disaster where we can’t fully operationalize all system hotels. We have hotels with rooms unavailable to guests because of inadequate staffing. We have closed restaurants. We have foregone valet service. We modified room service to a pick-up service; we have asked so many people in the hotel to multitask that we have hotel owners cleaning rooms next to their general managers and housekeepers.

How has it affected your customers?

If the hotel is open and honest about the situations they are facing and reach out to the guests proactively prior to their visit, or effectively communicate at check-in, then generally the guests are forgiving. You can forgive slow service, not bad service. 

When do you think it will end?  

Many think some of the dislocation of available talent in the industry has permanently left for better-paying jobs or more regular hours.  

Look, this is a tough business since we are open 24/7/365. This type of work is not for everyone. I have heard many folks liken hospitality to a ‘calling,’ citing that you really have to want to do this and want to take care of people. Sure, there are definitely some people who just glow with that type of energy. There are others who have made it their calling because it is a worthy profession that can lead to hotel ownership or an executive-level job, and a college degree is not necessarily required.

Wireless internet is a basic utility

You’ve been pretty vocal about wireless Internet becoming a basic utility for hotel guests, especially during the pandemic. Why is that?

I really have, but for so many different reasons. Today it starts with device proliferation from a guest’s phone or phones, tablet, Ultrabook or notebook, Nintendo Switch, other connected devices and the accompanying data needs of each device.  

Multiply that by 100, 200, 300 or more rooms and you can see that the pinch point of limited bandwidth free Wi-Fi offerings of any hotel cannot possibly satisfy the current and growing demand.  

To this, you can add the fact that we have so many mobile content creators from music to video and graphic art — sometimes a combination of all three. The uploading and transferring of massive files will totally dilute a hotel’s data abilities. Even at our best hotels, we had international press sending hard copies from Minneapolis back to their newsrooms because of bandwidth constraints. Sending 4K video with high fidelity audio was not possible.

How is Radisson meeting customer demand for more wireless bandwidth?

We have a current request for proposal for data providers, and I am asking for the variable ability to get maximum market available bandwidth on call as needed. 

However, for speeds that match the best available, we will be charged. As long as super high speed remains an anomaly, you can charge for it. There is always the chance that it follows breakfast trends and becomes a giveaway, but I don’t think that would happen until the provider costs are more reasonable. We keep hearing that you won’t need it with 5G, but at this point that seems to be about as true as the Segway changing the world.

How to benefit from the Breakfast Arms Race 

Let’s get back to breakfast. You’ve called the one-upmanship in your category the Breakfast Arms Race. Can you explain what you mean?   

I love this question. It is super simple, but it can get terribly expensive as you move up in the world of free breakfast.  

We have a modest free breakfast offering at Country Inn & Suites by Radisson. Yesterday, I was treated to breakfast by an amazing hostess at one of our hotels, Sandy from Cottage Grove, Minn. On that breakfast bar were scrambled eggs, hard-boiled eggs, sausage, three kinds of fruit, several types of yogurt, multiple varieties of cereal, multiple varieties of bread, and three types of fresh made-to-order waffles along with sausage gravy and biscuits.  

Now, our owners do this every day and give it away. They give it away because that has become a brand standard. It started with select-service hotels needing to provide breakfast because they did not have a restaurant. From simple coffee and maybe a muffin we have gotten to a place where a 12-year-old can polish off enough food that it would have cost his parents $15 to $30. 

Multiply that by a party of four and you can see that this has become nearly impossible for hotel owners to keep up with. However, if you are the first to drop breakfast on a street corner where the other three corners have hotels that are serving, you will lose business.

Where are we now in the conflict?

We were in a runaway situation prior to COVID. The pandemic was a reset, but as I described in the fabulous offerings of our hotel in Cottage Grove — you can see breakfast is back. 

How can consumers take advantage of this competition?

I think they take great advantage of it today. It is a terrific value. Over the past two weeks, I have met with owners of 150-room properties who are serving 500 breakfasts in a day.  Our own managed Country Inn & Suites by Radisson at the Mall of the Americas serves 700 breakfasts on Saturday and Sunday, each. 

That is a 233-room hotel providing a free breakfast to more than 1,400 people on a weekend. No one competing in this space can eliminate free breakfast — it is table stakes.   

Other than breakfast and the staffing shortage, what would you say is your number-one challenge when it comes to customer service?

Supply chain shortages whether it be food, operating supplies and equipment or capital items like furniture and fixtures.

Expanding during the pandemic

I’ve been hearing a lot about the Radisson brand expanding. Can you describe the scope of the expansion, and what is fueling it?

We have grown a tremendous pipeline with our Radisson and Country Inn & Suites by Radisson deals as we emerge from the pandemic.  

Our chief development officer, Phil Hugh, is the best in the business, and he has rallied his team around being flexible and providing our current and prospective owners unparalleled access to senior management to help build the confidence to franchise with us. We have added a managing director for Latin America with deep experience and have some great new properties, and we intend to enter into an agreement in Canada to grow substantially. What is fueling this is our new team and guidance from our board.

Where are you opening new properties?

All over from South America throughout the U.S. and Caribbean. We have new Radisson Blu Resorts in Punta Cana, Dominican Republic, and Aruba, as well as Radisson Blu Hotels in Toronto and Fargo. We also opened a Radisson Blu in Anaheim on the steps of Disneyland with a rooftop bar that has nightly views of the Disneyland fireworks. We also opened a Radisson Individuals hotel called the Sebastian in St. Augustine, Fla.

What does the growth mean for your customers?  

It means more places to earn points and burn points. Our largest criticism from our guests is largely around the fact that we are not ubiquitous — or everywhere they need to be.

Radisson has gotten into the soft branding market with something called Radisson Individuals. Can you explain what soft branding is, and how someone might experience it?  

Soft branding was a way for the larger brands to combat the growth of unbranded boutiques and other properties and an additional way to capture growth. The phenomenal success cannot be ignored. In fact, one of the other global major hotel companies just launched another one yesterday. They offer the connections to the reservations systems and other stout resources of a brand without the owner having to make their hotel comply with rigorous design standards of a standardized brand.  

So an owner can design their hotel any way they want as long as the quality of the hotel is in line with that particular brand’s positioning, and they likely fit into a soft brand. Starwood was one of the first with the Luxury Collection, but many have followed. Almost all have been a success.

What hotel guests should expect in 2022 

What’s your outlook for the rest of 2021 and early 2022, when it comes to occupancy and prices?

Everything has changed with the Delta variant. If I remember my Greek alphabet, there are twenty letters behind delta. We were forecasting a softer fall and early winter as the corporate and group travel take over the reins from the leisure business after Labor Day. 

Now, all of us are busy re-forecasting and looking at booking trends. They are still holding somewhat, but the fragility of our markets has never been greater.

If you were a hotel customer, knowing what you know about the hotel industry, how would you plan your upcoming vacations?  

Plan ahead, make sure you can cancel if necessary. Buy trip insurance if it is available and you have the means. Also, please be patient with your service level staff. Say thanks to the people who came to work.