Financial Performance Evaluation of Rezidor Hotel Group
Glion Institute of Higher Education
February 22, 2015
This report aim to analyze the financial performance valuation of the Rezidor Hotel Group for the last three years, based on the financial reports publically listed in the website of the group, and recommendations to improve the EBITDA margin target of the group.
Rezidor Hotel Group (RHG) is one of the fast growing companies in the hospitality and tourism industry, started with one hotel in Copenhagen, Denmark to invade the global market ...view middle of the document...
In 1989, the company moved from Oslo to Brussels and signed a franchise agreement with Carlson Hospitality Worldwide to create Radisson SAS and launch Radisson SAS Management School, in 1997; the company decides to focus on hotel management by going asse-light.
In 2002, the birth of Rezidor SAS Hospitality by signing a franchise agreement with Carlson to operate Country Inn, park Inn and Regent Hotels.
2005, operation, creation and development of Hotel Missoni with agreement with Missoni fashion house.
2006, creation of the name Rezidor Hotel Group and the listing in the Stockholm stock Exchange.
2007, Carlson becomes the big shareholder with 42% and the SAS airlines divested all the stakes in Rezidor.
2009, Radisson SAS becoming Radisson Blu, Park Inn becoming Park Inn by Radisson, opening of the first Misson Hotel in Edinburgh.
2010, Radisson Blu became the largest upscale hotel Brand in Europe.
With reference to the reports listed in the website, the company is putting more and more efforts to improve the quality, service and the EIBTDA to reach 12% with the application of the â€œroute 2015â€.
The company is announcing yearly reports of financial performance and the sustainability, the company is considered s â€œ go greenâ€ company and carrying the slogan â€œ yes I canâ€ to improve the satisfaction of the employees and the customers.
The RHG aim in 2015 to grow its hotel portfolio with the different brand of the hotels: Radisson Blu , Park Inn by Radisson and Country Inns & suites by Carlson.
REZIDOR BUSINESS PLAN
The business of RHG is distributed in hotel management, propertiesâ€™ franchise, and hotelsâ€™ lease from where the group getting the source of the income.
Leasing: is asset finance by paying periodic fees.
Managing: the use of the expertise of the company and gets fees towards its services, but the owner of the building is incurring all the operating costs.
Franchising: when a company sells the rights of a franchise to the owner of property and it is managed by a third party, the owner is responsible for the full operations.
Retrieved from annual report of RHG of 2012, 2013 and 2014
Summary of the Three Component of Income Source of RHG in 2012, 2013 and 2014
From the graphs thru the 3 years, we can see a decrease of the leasing agreement in 2013 by converting a 2 leased hotel in Sweden to franchise and exit seven leases in France which an increase of 0.5% on the EBITDA occurred, as Wolfgang M. Neumann, President and CEO of RHG has mentioned in the report of end 2012 â€œ our commitment to profitable asset-light growthâ€ and he insisted to mentioned that the target will be either by management or...