IDEEA Podcast Episode 2: David Jenkins, Radisson Hotel Group
Live from the Radisson Blu Beke Hotel in Budapest, David Jenkins, Vice President of Business Development for Radisson Hotel Group, joined the IDEEA Podcast's second episode to share some of Radisson’s goals and strategies for future investment and development in Central and Southeast Europe.
The discussions also highlighted the growing opportunities for conversions of unbranded hotels to branded hotels and the increasing preference for luxury products by both investors and consumers, such as the Radisson Collection.
David also answered without hesitation when asked which destination he would most like to see the Radisson brand in. Find out which city it was and hear the insights from the conversation by listening to the episode on the go or watching the entire discussion on video.
Welcome to the IDEEA Podcast, a channel for the IDEEA Hospitality Investment Forum, which is an annual gathering for the Hospitality Investment Community in Eastern Europe. Tune in to insightful conversations between the idea team and hospitality investment leaders and innovators across Europe. And now let's dive right into today's episode.
Marina Franolic 00:29
Hello, everyone, welcome to IDEEA Hotel Investment Forum Podcast. Today, it's my great pleasure to have as our guest David Jenkins, Vice President Business Development from Radisson Hotel Group. David, welcome!
David Jenkins 00:46
Hi, nice to see you again. I'm sitting here in my Radisson Blu in Budapest today.
Marina Franolic 00:53
Exactly. This was the first question I wanted to say. You have a really cool background. Can you tell us a little bit more about the Radisson Blu.
David Jenkins 01:01
Well, this is a relatively better [phonetic 01:02] historical building in the center of Budapest and it's recently been refurbished over the last 2, 3 years. So now it's a brand new, kind of refurbished Radisson Blu. We're very happy with it. It's with our partners, who were the owners and manage the account here as well. So I was here for a few days looking at some new projects in Hungary and we're also opening Radisson Collection and a Radisson in Budapest next year. So it's very exciting times for us in Budapest.
Marina Franolic 01:31
I wanted to ask David, you just said you're planning to open two hotels within this year. And on the other side, we have a-- We're in the post-pandemic period. We have a war in Ukraine. The CEE and SEE economy has been severely hit by the pandemic. And I wonder what is the situation within hospitality development? Obviously, in Budapest, it's a good one. But then it seems that the appetite from investors for hospitality investment has not lowered. But I wonder what kind of investors are looking into this region? The profile of the investor, has it changed from the pre pandemic times?
David Jenkins 02:19
I wouldn't say so, I think there is a still a mix of family business. High net worth individual and for marginal institutional investors is pretty much similar as it's been. If you look at the operating numbers, you know, if I look at my hotels, like in Split or in Budapest or in Bulgaria. They're doing very strong numbers, people are traveling again, people want to travel, not just Resorts but City destinations. So that things are certain level of confidence that the demand is returning for the hotels, and then investors see this demand as well.
David Jenkins 02:55
What we are seeing though are a lot of opportunities for conversions of unbranded hotels into branded hotels. So it's not so much of a Big Greenfield 5 year developments that we're seeing, we're seeing more opportunities of people wanting to flip the property into a branded Hotel. So that's a quicker return. And of course, a less expensive investment.
Marina Franolic 03:18
And that's actually a great opportunity for brands now to finally step into the market of the existing properties, give some added value and showed the value actually that the investor and the owner had with Oh, yes, I've heard... Congratulations! Really nice hotel actually I visited.
David Jenkins 03:41
Oh, excellent, good. So we're very happy with that beautiful property. But that's a great example of an existing property that was being redeveloped and then attaching the brand to get access to those reservation systems loyalty program, etc., etc. So I'm seeing more of that. I was in Bulgaria two weeks ago [phonetic 03:58] looking at local portfolio, existing hotels, looking at something now in Belgrade existing hotel. So, you know, these are the opportunities I'm seeing more of rather than, as I said, the Big Greenfield developments that we would have been looking up pre-pandemic.
Marina Franolic 04:17
But do you see that investors are pulling little bit back from the Greenfield. I mean, it was never really in the focus, but is it even less now?
David Jenkins 04:30
I think so. Yes. But we're seeing fewer of these big mixed use development opportunities. They are, they do exist, but certainly it's focus from the operators and the investors on conversions.
Marina Franolic 04:45
Okay. And tell me.... I mean, you said now little bit [unintelligible 04:50 Blu, but what are the hotel products that the investors are looking for or the customers are looking for? What do you think that...? Which brands would you say is maybe the most likely to be signed now, within Radisson brand?
David Jenkins 05:08
Good question. I mean, what we've seen actually, from a guest perspective, first of all, because that drives everything, you know, what is the guest behavior? And it is going to then lead into what is the investment behavior. We're seeing guests coming back to luxury. We've seen guests coming back to the upper upscale, rather than the mid-scale. So in our case that would be Radisson Collection. You know, we're seeing a lot of interest in that brand particulates from the guests. So the hotels are getting busier I know for investors as well.
Marina Franolic 05:42
Now, maybe question for crystal ball, to be honest. But is that the result because people haven't been traveling for two years and now they have some cash aside? Do you think this will continue? Because on one side, we're talking about inflation, we're talking about raising prices of gas. Germany's now helping and lowering the prices of train tickets... So different story on one side, and then we're talking tourists are actually looking more at the luxury aside?
David Jenkins 06:14
It's a really complicated question, isn't it? Because you know, I wish I did have a crystal ball in front of me. You know, on one hand, we see there's a huge demand for people to travel, you're quite right, they've been not going anywhere, really, for two years. Maybe they've had money saved up, maybe they're just the human needs to actually travel is there. But at the same time... And I am in Budapest, now, I was traveling from the UK. And I was queuing for hours at airport. Our flight was canceled and delayed. So you have in one hand the people want to travel. The other hand, the airlines are suffering huge crisis and staffing. And people try to travel it's very difficult. So when they do go away, I think they're treating themselves for a nicer experience. And is that sustainable? Probably not. The other segments will come back as well, definitely. But for the moment that's what we're seeing in terms of City Hotels and Resorts.
Marina Franolic 07:14
Indeed, it's so interesting.
David Jenkins 07:16
[crosstalk] how that goes going forward, there's so many people looking at business trips, and I didn't want a few extra days, breaking a lot of interest now with more resorts than they used to have before. So it was never really a big focus for those resorts, it's become more so. And the same for the other brands as well.
Marina Franolic 07:35
Exactly. That's the next question. So during pandemic, the big difference, and what I've seen with investors is that they finally start talking about resort development, and interest in regional markets, which was never the case, it was always City Center Hotels, 120 plus rooms, distressed. But now, do you think that this is something also that, will stay that actually Leisure Market proven to be stronger and healthier and more resilient towards the city, even though you said you're opening two hotels in Budapest this year. So obviously, cities are also coming back to life, to normal numbers.
David Jenkins 08:18
I mean, certainly in Budapest has a very strong leisure market, as well as business. So you have that leisure... Resort, isn't the only type of leisure travel than the rest of city breaks [phonetic 08:29], and so on and so forth. I've been in the city today, and it's full of American tourists. And that's a very good thing that American tourists are coming back, because they're usually the ones that are more skeptical about traveling large distances when there's a pandemic or a war, etc., etc. So that has really good to see, very encouraging my hotels show at the moment. So that's very good news.
Marina Franolic 08:53
This really nice, yes, they're [crosstalk]
David Jenkins 08:55
Things go in cycles, you know, we're seeing a slightly different type of resort development now. We signed one recently, I can't say where but hopefully announce in a bit year events, let's see, but it's a residential type resort, the other investors making money twice as we are, they are selling the units, they are coming back to Radisson to manage. And we're taking obviously a percentage of the sale and managing property. So, that's kind of we are seeing the same in Montenegro, we have seen Croatia. And we're seeing that across the region. So those are the types of projects we're seeing more and more of. So it makes sense financially, it's not a straightforward resort, as we would have seen before. But you know, these things never... Things go in cycles. Of course, they do and I think, for most of our investors, it's about having a balanced portfolio, not own the resorts, not own this but to try to get that mix so that they have the leverage during the good times.
Marina Franolic 09:54
Even though now that you said that they can actually return their money twice. I think that everyone will just give it another thought to leisure and go with resorts.
Marina Franolic 10:07
David, one question, what is the destination [unintelligible 10:12] where you would really like to see Radisson brand and you still haven't managed to sign the deal?
David Jenkins 10:19
Marina Franolic 10:21
Okay, good one. [Crosstalk] I thought you'll take more time.
David Jenkins 10:32
We were really keen to get something in Sofia. Which we managed to open the hotel in Sofia [unintelligible 10:40] individuals. So I managed to that was one of my big targets.
Marina Franolic 10:42
So Dubrovnik needs a check mark. Tell me one more thing. So IDEEA Hospitality Investment Forum is happening in Athens September 26th, 27th. So Radisson is one of our big sponsors, and has been a supporter for many years now. Why do you think delegates should register and come to idea?
David Jenkins 11:05
Well, I mean, first of all, they get the chance to meet you and me. You know, more and more.
Marina Franolic 11:12
That's the most important one.
David Jenkins 11:13
I mean, that's enough, isn't it? Okay, but listen, it is one of our favorite events, I like the fact that more or less every year, you change the location. You know, exactly [phonetic 11:25] where Belgrade never moved into Athens, it was very inclusive, I would say of the broader region, it allows the event to have a broad focus. It says it's a regional event. And it is a regional event by going to different parts of the region, unlike some events that call themselves regional, but they're always in the same place. And you end up with 80 to 90% focus on one country. So I like the fact that you're regional and you are original. And that then brings regional investors, which for me, as a brand helps me to meet more people, and to try and do more deals. I think therefore investors get to meet more of us, we get to meet more of them. And it's a very compact event. I think the agenda is very, very evenly spread between the different countries and different topics. I think the organization of your team is very, always very good. I like the way it's been set up with the logos and the booze [phonetic 12:16]. It's a very professionally run events, and it doesn't take itself too seriously. A bit like myself, you know, there's always a fun angle. The events are always nice, evening events, the drinks, the cocktails, there's a great mix between getting the business done, and having some fun, because then [crosstalk]
Marina Franolic 12:38
Oh, I think a lot of businesses done.
David Jenkins 12:41
Absolutely. It's done. It's done over the bar in the evening. So I think it's great. I think the fact that you've brought into this year to include Greece, and Romania, Bulgaria is very beneficial, because those are big markets for us. We've been doing a lot of good stuff in Athens, and my colleague will be joining us who looks after Greece, so we will have not just one person from Madison [phonetic 13:05] maybe two or three. So that's nice as well for us to show our strength. I would recommend everyone comes in Athens. Well, I love the city. So it's nice to visit, isn't it?
Marina Franolic 13:17
And it's the end of summer, it's going to be actually end of September. So it's still going to be warm. So whoever wants to do business enjoy a little bit wonderful city, definitely should come, and I invite you all to register for idea. And especially our tickets are still at the lower end of the price. So hurry until they don't get really expensive.
Marina Franolic 13:42
David, thank you so much. It was really a pleasure talking to you. I'm really looking forward actually to see you in person soon. I hope that you're enjoying Budapest. Well thank you once again. And let's meet with everyone at ideea.
David Jenkins 14:01
Absolutely. Looking forward to have a-- if you don't see you have a great summer, and we'll see you in the autumn.
Marina Franolic 14:07
Thank you. Bye, everyone. Bye, David.
David Jenkins 14:12
Thank you for listening to the IDEEA Podcast, the channel for the IDEEA Hospitality Investment Forum. You can find a full transcript of this conversation in the Content Library on ideaa-forum.com. With other reports and insights. We look forward to welcoming you and your colleagues in person at IDEEA in Athens, Greece on the 26th through 27th of September 2022. If you haven't registered yet, please go to ideaa-forum.com. To purchase your past today and save before ticket prices increase. Please feel free to email us with any questions at Hello at the bench.com.
Until the next episode, stay safe and keep well. Bye-bye for now.