International tourists hit the one billion mark for the first time last year. Wolfgang Neumann, CEO of the Rezidor Group, explains how one of the world’s biggest hotel operators hopes to cash in
Smart, slick, sophisticated and genial, Wolfgang Neumann is your archetypal hotelier. And if he’s looking satisfied, he has good reason to be.
“Last year, for the first time, tourism saw a billion arrivals globally; it’s a growth industry,” the Rezidor Group’s CEO says. “The emergence of budget airlines means that travel has become so much easier, more affordable and more accessible to the masses.”
Neumann’s not wrong there; as the middle classes expand in key emerging markets, the hospitality industry is all set to benefit. Last year, international tourist arrivals in emerging markets rose by 4.1 percent, outperforming the 3.6 percent growth in advanced economies, according to UN’s World Tourism Organisation. The highest increases were seen in South-East Asia and North Africa (up by 9 percent), while Central and Eastern Europe saw growth of 8 percent.
That spells good news for hoteliers like Rezidor, which, like many of the world’s big hotel groups, is focusing heavily on emerging markets. And by any measure, Rezidor’s growth has been rapid. When Neumann’s predecessor, the redoubtable Kurt Ritter (who retired at the beginning of this year) took over at the Brussels-based Rezidor Group, he was managing eighteen hotels.
Just over 20 years later, Ritter found himself overseeing 319 properties, with another 100 in development. He had also been the driving force behind the tie-up between Rezidor and Minneapolis-based Carlson. The two brands together run some of the industry’s biggest names, including Radisson, Radisson Blu, Park Inn by Radisson, Country Inns & Suites by Carlson and Hotel Missoni. Altogether, the Carlson Rezidor Group has just over 1,300 hotels, in 80 countries, making it the ninth-largest hotel company on the planet, with over $7bn in revenues last year.
Neumann’s job is now to build on that platform. Unsurprisingly, he sees the Middle East as a vital cog with regard to future growth. With 30 hotels in operation, and with another fifteen in the pipeline, Rezidor already has a pretty strong presence in the region. In the UAE specifically, Neumann says he is excited about last week’s announcement that Dubai has set itself a target of 20 million visitors by 2020.
“It’s, as usual, a very ambitious target, but when you look at the track record and history of Dubai…I think they can make it,” he says. “What it ultimately means is that Dubai as a destination will continue to grow, there will be further investment into Dubai, and with that comes more arrivals and more demand for accommodation.”
When asked what this specifically means for Rezidor, Neumann doesn’t reel off a spate of planned new properties, which is unsurprising given how recent the announcement has been. But there is little doubt that both Dubai and Abu Dhabi are a major part of the firm’s focus.
“We have seen in the last eighteen months the market rebounding [in Dubai],” Neumann says. “There’s been a bit of a difference between Dubai and Abu Dhabi; Dubai has had the supply increase and it has been able to absorb that. Abu Dhabi had even more of a supply increase, but was perhaps not so successful in absorbing that supply, so it’s more challenging.”
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