The name that Carlson Hotels has given to its global growth strategy puts it succinctly: Ambition 2015. Among the lofty goals the company outlines in the plan is to expand the portfolio at least 50 percent by 2015, to more than 1,500 hotels.
It's a great time to invest in the hotel business, according to Carlson CEO Hubert Joly. The company is demonstrating that with the investment it is making in the Radisson flag: The brand's $1.5 billion makeover is a cornerstone of the Ambition 2015 plan. The overhaul will include new room, restaurant and service concepts, and will establish flagship hotels in key U.S. cities. When completed, the brand will offer two service-level categories, the upper-upscale Radisson Blu and the upscale Radisson Green. Property numbers will expand from 422 to more than 600 by the target date.
Such ambitious plans might seem anachronistic, given that last year was the worst in recorded history for many brands. But in terms of investment and capital, it's important to remember that brands generally don't own hotels, said Bjorn Hanson, clinical associate professor at the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University.
"Also, an increased number of hotels does not always indicate new construction, but includes conversion from other
brands and independents," Hanson added.
For example, Europe's hotel construction pipeline continues to decline, according to Lodging Econometrics, the hotel real-estate advisory, but a high percentage of projects in development already have selected a brand. The accompanying marketing and operating benefits are increasingly compelling to European developers and lenders, according to Lodging Econometrics.
That's likely a factor in the expansion plans announced by Marriott International and Starwood Hotels and Resorts at the International Hotel Investment Forum in Berlin last month. Fifty new Starwood properties are slated to open in Europe, Africa and the Middle East by 2012, and Marriott expects to double its European room count to 80,000 by 2015.
Hotel companies also have elected to focus on lower-service chain scales. Carlson's Ambition 2015 plan includes an emphasis on midscale growth in key emerging markets. And Starwood will open 16 new Four Points by Sheraton properties in 2010 alone, following a $1 billion investment to spruce up that brand.