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Rezidor Hotel Group AB FY 2010. Mars 2011. Top 10 Hotels Players in Europe Rezidor ranks 5 th in number of rooms, first on the upscale segment (with its brand Radisson Blu ). As of Dec. 2010. (1) . Only Midscale. (1) . (1) . Resort. (1) . Resort. (1) . Only UK.

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slide2
Top 10 Hotels Players in EuropeRezidor ranks 5th in number of rooms, first on the upscale segment (with its brand Radisson Blu)

As of Dec. 2010

(1)

OnlyMidscale

(1)

(1)

Resort

(1)

Resort

(1)

Only UK

Sources: MKG Hospitality – Feb. 2011, Companies annual reports 2010 and corporate website

(1)Nb of rooms based on internal estimates

2

rezidor hotel group ab summary
Rezidor Hotel Group AB.Summary

1. Company overview Slide 3

2. Company organization Slide 4

3. Brands positioning Slide 5

4. Geographical breakdown Slide 6

5. Operating mode Slide 7

6. Group strategy Slide 8

7. Pipeline and lodging development Slide 10

8. Key figures Slide 11

9. SWOT analysis Slide 13

10. Company history Slide 14

11. Brands description Slide 15

Rezidor – Company profile

FY 2010

1 company overview
1. Company overview

Nordic Europe (2)

Nordic Europe(2)

Western Europe

Western Europe

Eastern Europe

Eastern Europe

MEA

MEA

# rooms

segment

# hotels

Revpar

ADR

OR

Description

Main Shareholders

  • Rezidor is a Hospitality Swedish company operating in the traditional lodging industry
    • Three main brands: Radisson Blu, Park Inn by Radisson and Hotel Missoni
    • Asset-light business model
    • 4,947 employees
  • Fifth hotel player in Europe (in nb of rooms)
    • Radisson: largest upscale hotel brand, according to MKG
    • Segmented portfolio: Luxury/Lifestyle (Hotel Missoni), Upscale (Radisson Blu), Midscale (Park Inn by Radisson), Limited service (Country Inn)
    • Presence in 48 countries through EMEA
  • Radisson Blu and Park Inn by Radisson developed in EMEA under Master Franchise Agreements with Carlson
  • Listed on the NASDAQ OMX Stockholm Exchange on November 2006

Main Figures

Segmental Revenue and EBITDA

Revenue

EBITDA (1)

Excluding Western Europe negative EBITDA (-€4.6m)

Incl. Denmark, Finland, Iceland, Norway and Sweden

Sources: Reuters as of 28 April 2011, Rezidor Annual Report 2010, Rezidor website

Rezidor – Company profile

FY 2010

2 company organization group companies and legal structures

Rezidor Hotel Group AB

(Sweden)

100% shares and votes

Rezidor Hotel Holding AB

(Sweden)

100% shares and votes

Rezidor Hospitality A/S

(Denmark)

100% shares and votes

100%

100%

100%

100%

100%

Rezidor Hotels

ApS Danmark

(Denmark)

Rezidor

Regent A/S

(Denmark)

Rezidor

Sweden AB

(Sweden)

Rezidor

Park ApS

(Denmark)

Rezidor Loyalty

Management A/S

(Denmark)

100%

100%

100%

100%

100%

Rezidor

Russia A/S

(Denmark)

Rezidor

Comerstone A/S

(Denmark)

Rezidor Hospitality

Norway AS

(Norway)

Rezidor

Country A/S

(Denmark)

Rezidor

Lifestyle A/S

(Denmark)

2. Company organizationGroup companies and legal structures

Sources: Company reports

Rezidor – Company profile

FY 2010

3 brand positioning
3. Brand positioning

Hotels / rooms / countries

Luxury

(% of room network)

1 h. / 136 r. / 1 c.

Upscale

(% of room network)

200 h. / 46,122 r. / 48 c.

(2)

Midscale

(% of room network)

103 h. / 19,232 r. / 26 c.

(1)

Economy

(% of room network)

2 h. / 133 r. / 2 c.

Source: RezidorAnnual Report 2010

NB: 6 Regenthotelsincluded in Otherhotels in Annual Report

2 Country Inn hotels in EMEA (Germany and Austria)

Full Service

Limited Service

Rezidor – Company profile

FY 2010

4 geographical breakdown
4. Geographical breakdown

Hotel and room network

As of December 31st, 2010

312 h, 66,375 r

20%

56h

12,945r

Nordic Europe

23%

60 h

15,071r

Eastern Europe

44%

WesternEurope

160 h

29,406r

13%

36 h

8,953r

Middle-East, Africa & Others

Share ofglobalnetwork

(in nb of r)

X%

Rezidor – Company profile

FY 2010

Source: Rezidor Annual Report 2010

5 operating mode

Franchised

Owned

Leased

Managed

5. Operating mode

2002

133 h. / 28,900 r.

2010

312 h. / 66,375 r.

+37,745 rooms

+130% over 8 years

Source: Rezidor Annual Report 2002 & 2010

Rezidor – Company profile

FY 2010

6 group strategy important developments of the year
6. Group strategyImportant developments of the year
  • Park Inn by Radisson
    • New name launched in Q2 2010
    • Link with Radisson’s brand image to enhance further growth
  • Sale of Regent
    • Positive effect of M€ 5.7
    • Management services still provided to Regent hotels after sale
  • Portfolio agreement in the Baltics
    • Agreement to re-brand 10 Reval hotels (ca 2,400 rooms) in the Baltics to Radisson Bluand Park Inn
    • Agreement to strengthen Rezidor’s position in the key markets Riga, Tallinn and Vilnius
  • Carlson’s shareholding
    • Carlson, Rezidor’s major shareholder, has increased its shareholding to 50.03% of the registered shares in May 2010

Brand strategy

M&A

Development strategy

Ownership

Source: Rezidor Annual Report 2010

Rezidor – Company profile

FY 2010

6 group strategy strategic axes
6. Group strategyStrategic axes
  • Margin improvement: EBITDA target margin of 12%
    • Tight cost control (following the cost reduction program of 2009)
    • Substantial increase in cash flow in 2010 allows increase in maintenance Capex
    • Fixed-lease structure to be maintained in Western Europe
  • Asset light strategy
    • Increasing proportion of managed and franchised hotels (95% of the pipeline vs. 74% of the actual portfolio)
    • Hotels conversions privileged in some specific markets such as UK, Germany and Russia for Park Inn brand, while Radisson Blu expansion mainly through new builds
  • Focus on expansion of core brands: Radisson Blu, Park Inn by Radisson
    • Disposal of peripheral assets: sale of Regent luxury brand to Formosa in April 2010
    • Key priority to boost brand awareness as a mean to increase RevPar penetration: new name for Park Inn followed by a major new marketing and sales campaign in 2011, mainly in UK
  • Expansion plans in emerging countries
    • Focus on Russia/CIS and Africa: strong economic growth, undersupply or old inventory combined with high room demand and low operating costs
    • Emerging markets represent over 70% of the pipeline (vs. 36% of rooms in operation)
    • Radisson Blu: key to entering new markets, Park Inn usually following the footsteps of Radisson Blu
    • Rezidor is considering to enter the economic segment in Middle East, Russia and Africa under a new brand*.

Rezidor – Company profile

FY 2010

Sources: Rezidor Annual Report 2010

*Press review as of March, 2011

7 pipeline and lodging development
7. Pipeline and lodging development

Business Development in 2010

  • Openings: +7,173 r. (32 h.)
  • Closings: -1,444 r. (6 h.)
  • Net evolution: +5,279 r. (+9,4%)

Pipeline 2011-2015 : 21,493 additional rooms (32% of the current network), incl. 8100 new rooms signed in 2010

Per region

Per brand

Per contract type

Nordic Europe

Radisson

Leased

Western Europe

Park Inn

Managed

Eastern Europe

Missoni

Franchised

MEA

Focus on Eastern Europe and MEA

Two core brands: Radisson Blu and Park Inn by Radisson

+95% current pipeline managed & franchised

Source: Rezidor Annual Report 2010

Rezidor – Company profile

FY 2010

8 key figures p l evolution forecasts
8. Key figuresP&L evolution & forecasts

Rezidor – Company profile

FY 2010

slide13

9. SWOT analysis

Strength

Weaknesses

  • Strong support of the worldwide group Carlson, which owns 50.1% of the company
  • Large product range, from midscale to luxury
  • Large brand awareness in Scandinavia
  • Leadership in Scandinavia
  • Good business model (upscale with maximum pricing power, strong operating leverage, no debt, well positioned to win management contracts)
  • Geographical footprint limited to EMEA
  • Expensive lease commitments
  • Dependence on Carlson
  • Poor business control, especially as Rezidor pursues an aggressive growth plan
  • Bad ratings in customer satisfaction surveys
  • Difficulties in securing new hotel contracts or keeping/prolonging maturing contracts

Opportunities

Threats

  • Improving business mix (asset light management contracts)
  • Well positioned for recovery, thanks to costs measures implemented in 2009
  • Growing share of the branded hotels trend for conversion from unbranded to branded hotels
  • Strong room rollout potential
  • Central and Eastern Europe as one of the world’s fastest emerging travel markets
  • Intense competition, with a large number of players, especially in Europe

Source: Broker research, June 2010

Rezidor – Company profile

FY 2010

10 company history
10. Company history

2009

2006

2010

Sale of Regent Hotels to Formosa

Radisson SAS becomes Radisson Blu

Rezidor goes public on the Stockholm Stock Exchange

2005

Hotel Missoni is launched, in partnership with the Italian fashion brand of the same name

Multi brand franchised master agreement, adding 3 other Carlson’s brands to Rezidor Portfolio: Regent, Park Inn and Country Inn

2002

2001

SAS International Hotel becomes Rezidor

First master franchise agreement with CarlsonRadisson SAS is born

1994

First hotel outside Scandinavia: SAS Hotel Kuwait

1980

Scandinavian Airlines founds the company SAS International Hotels by opening its first hotel, the SAS Royal Hotel in Copenhagen

1960

Rezidor – Company profile

FY 2010

Source: Rezidor Website

slide15

11. Brands description

  • Full Service

Rezidor – Company profile

FY 2010

Source: Rezidor Annual Report 2010

11 brands description full service hotel missoni
11. Brands descriptionFull service – Hotel Missoni

Overview

Network

Full service, upper upscale brand

  • Focusing on lifestyle and design aspects
  • License agreement with the italian fashion house of the same name
  • Woldwide licensing agreement
  • First Hotel opening in 2009

Main competitors

  • So by Sofitel, W, Morgans, Malmaison, Bulgari, Armani
  • Network
  • 2 hotels, 305 r. (incl. newly opened Missoni Kuwait City)
  • Pipeline = 3 hotels / 508 rooms

Locations

  • Fashionable cities as well as in up-and-coming resort areas
  • Geographical breakdown
  • Worldwide, with a focus on Europe and the Middle East
  • Two hotels operated in Edinburgh and Kuwait
  • Future openings include Oman, South Africa, Brazil

Rezidor – Company profile

FY 2010

Source: Rezidor Website

11 brands description full service radisson blu
11. Brands descriptionFull service – Radisson Blu

Overview

Network

Full service, upscale brand

  • Largest Rezidor hotel brand
  • Largest upscale hotel brand in Europe
  • Ranging from small boutique hotels to major city landmarks
  • Managed / Leased contracts
  • Trademark of Carlson, master franchise agreement with Carlson until 2032, with the option to extend the agreement until 2052

New architecture and design policy

  • Rebranded as Radisson Blu in 2009
  • Key figures

FY 2010

  • ADR: €110.3
  • RevPar: €70.5
  • Occupancy Rate: 63.9%

Main competitors

  • Pullman, Hilton, Marriott H&R, Sheraton
  • Network
  • 200 hotels / 46,122 rooms in operation= 230 rooms per hotel on average
  • Pipeline: 52 hotels / 12,922 rooms

Locations

  • Mainly located in city centers, leisure resorts and airports

FY 2009

  • ADR: €105.95
  • RevPar: €65.9
  • Occupancy Rate: 62.2%

Rezidor – Company profile

FY 2010

Source: Rezidor Annual Report 2010, Rezidor Website

11 brands description full service park inn 1 2
11. Brands descriptionFull service – Park Inn (1/2)

Overview

Network

Full service, midscale brand

  • New name to be used from January 2011: Park Inn by Radisson
  • Mainly operated under franchise agreements
  • Targeted markets: UK, Germany and Russia (growth mainly driven by conversion)
  • Trademark of Carlson, master franchise agreement with Carlson until 2032, with the option to extend the agreement until 2052
  • Key figures

FY 2010

  • ADR: €64.5
  • RevPar: €37.5
  • Occupancy Rate: 58.0%

Main competitors

  • Novotel, Scandic, Holiday Inn
  • Network
  • 87 hotels / 16,121 rooms in operation= 185 rooms per hotel on average
  • Pipeline = 51 hotels / 9,408 rooms

Locations

  • City centers, suburban locations and transport terminals

FY 2009

  • ADR: €63.8
  • RevPar: €33.6
  • Occupancy Rate: 52.6%

Rezidor – Company profile

FY 2010

Source: Rezidor Annual Report 2010, Rezidor Website

11 brands description park inn 2 2 affiliation brand strategy case study
11. Brands descriptionPark Inn (2/2) : affiliation brand strategy case study

2000

2002

2010

2003

  • Rebranding operation to Park Inn by Radisson to enhance further growth
  • Carlson signs a master franchise agreement with The Rezidor Hotel Group to develop Park Inn in EMEA
  • Rezidorrelaunches Park Inn. First hotel in Berlin
  • Carlson acquires the Park Inn brand from Olympus Hospitality Group
  • Park Inn by Radisson is a “fresh and energetic” midscale hotel brand (119 hotels / 85% in Europe)
  • Relaunched in 2003, stand-alone brand until 2010, when an affiliation to Radisson wasdecided (starting Jan 2011)
  • New name is in line with Rezidor decision to focus its dvlp on its two core brands, Radisson and Park Inn
  • Objectives : The link with Radisson and its great strength and reputation will allow Park Inn to grow faster and to increase the brand awareness. But no repositioning / upgrade seems to be planned.
  • Implementation Plan :
    • The rebranding process will start in Park Inn’s key home market, the United Kingdom, before extending the process across Europe, Middle East and Africa.
    • The transition of Park Inn hotels to Park Inn by Radisson will be completed by the end of 2011.
    • First Park Inn by Radisson in Brazil, developed by Atlantica Hotels International
  • Pipeline1 : 41 in EMEA, 3 in North America , 2 in APAC (India), 2 in Latin America

1LodgingEconometrics Q4 2010

11 brands description limited service country inn
11. Brands descriptionLimited service – Country Inn

Overview

Network

Limited service, economy brand

  • Brand under development, currently under review by Rezidor
  • Trademark of Carlson, master franchise agreement with Carlson until 2032, with the option to extend the agreement until 2052

Main competitors

  • Ibis
  • Network
  • 2 hotels / 133 rooms in operation
  • Geographical Breakdown
  • Germany
  • Austria

Rezidor – Company profile

FY 2010

Source: Rezidor Annual Report 2010, Rezidor Website