Radisson Plans to Triple Rooms in China Despite U.S. Trade War

By Dev Anand | 27 June 2018

Date: June 2018

Location: China

Name: Radisson Hospitality

Radisson Hospitality Inc. is plunging ahead with a plan to triple capacity in China over five years, despite its expectation that a looming trade war with the U.S. will damp travel demand in the country.

The chain controlled by China’s HNA Group Co., the aviation-to-hotels conglomerate, has 15 hotels in the country with a total 4,147 rooms, with 16 new properties under development, John Kidd, chief executive officer of Minnesota-based Radisson Hospitality, said in an interview Monday in Singapore.

China is a “critically important market for us, particularly as our owners are HNA and they are able to provide us support, guidance and connections to the market,” Kidd said. He was president and chief operating officer of HNA Hospitality Group before moving to Radisson.

Trade tensions between the U.S. and China could put pressure on room occupancy and rates for eight to nine months, especially affecting corporate travel, Kidd said. “There will be no need for travel if you can’t sell goods in a particular market.”

Trump adviser talks down trade policy threat to calm markets

Beyond that period, the picture brightens, Kidd said, as domestic tourism demand will rise faster than hotel rooms are being added. The focus is on expanding its Radisson and Park Inn affordable accommodations brands in second- and third-tier cities, such as Ningbo and Wuhan, he said. HNA gained control of Radisson through its acquisition of Carlson Hotels Inc.

The growth trend in China’s travel market is moving away from luxury toward mid-scale, affordable brands, said Katerina Giannouka, Radisson president of Asia Pacific.

THPT Comment: Are HNA in for the long-term, with the Chinese government’s edict on Chinese companies owning such large investments and debt in global hotels outside of China? With just 15 hotels open, Radisson are probably behind the race with their competitors such as Hilton, Marriott et al.

First Seen: Bloomberg

Posted in Industry News & Reports