Stefan Kuehr - General Manager, Radisson Royal Moscow

How long have you been working at the Radisson Royal?

For two years and four months now in the position of General Manager. I am in charge of all the commercial aspects as well as operational departments, ensuring 100% guest satisfaction and a good return on investment.

Before this you were working in East Europe, is that right?

Yes, I have worked for almost 12 years in this part of the world. I started my career within the Carlson Rezidor Hotel group 11 years ago in St. Petersburg, after that I had an assignment to open a hotel in Almaty, Kazakhstan where I used to live for two years. After that I moved for three years to Baku, Azerbaijan, before coming back to St. Petersburg taking on an assignment within the group and since 2014 I am here in Moscow. Despite being a passionate hotelier my strongest assets are the broad market experience and of course my language skills, which are extremely important to succeed.

I like the challenges that the present economic situation presents, because it just makes you stronger as a professional, and with all the challenges you have, with all the setbacks you have, you are much more eager and as well pushed to look for new opportunities, which also drives the business further.

So Kazakhstan and other places where you were, are all within the previous territory of the Soviet Union. Do you think that the mind-sets of people in all of these people is similar?
Even though they were part of former Soviet Union, each country is different. In Azerbaijan, for example, they have a much more Middle Eastern way of doing business, than in Russia. In Kazakhstan you can clearly feel the Chinese influence, because it is close to China, especially in Almaty. There are similarities, at least the people who are over 30 I would say, they do all speak Russian, but the legislations and customs are different, you have to adjust.

So there are more different things than similarities?

I would rather tend to say YES.

What is it like working with the people you work with, here in the capital of the Russian Federation?

Talking about hospitality, the people became very skilled, we do have extremely good professionals, and they are all locals. Many years ago, most executive managers in hotels were foreigners, except for the heads of specialized divisions like head of security, technical director. But in most of the hotels you still had a lot of expats. Today the situation has changed and I am very proud to say that, for example in my hotel we are only two expats now, all other positions are held by super professional local people, who are exceeding the company’s expectations by a long way! I doubt that we would be a better hotel by having replaced those locals by expats. It doesn’t depend where you are from, what is important that you perform and that you are able to work in hospitality or not. And most important is if you are a host or not, because that’s what we do, serving and hosting people, from all over the world. Of course to have a multi-national team is great for the company’s culture and having some expatriate team members reflects the image of an International hotel group better. So it’s also very much a marketing tool.

Is business doing OK, or not, because of this crisis?

There are some International consulting companies which are handing out statistic on a regular basis and one of those reports, published by JLL, said that the Moscow and St. Petersburg hotel markets are booming, especially in the upper-upscale and luxury segment.

Is that report accurate?

Yes, we do benchmark and measure ourselves with a so called ‘RevPAR’ (revenue per available room) and this index shows a growth by app. 15% YTD vs. 2015 for Moscow.

So you have come out of the crisis?

No we haven’t come out of the crisis, we just face a new reality. We like to speak about a great top-line development, however bottom-line results remain challenging.
As an organisation we had to make certain adjustments to our cost structure. We haven’t just cut costs; no we started to optimise meaning we became more efficient.
The minimum target set out is to maintain profit levels seen before the crisis hit.

Even if keeping the profit margin damages your business irreparably?

We are in the right business segment and we are doing the right things, also we have been very strong before. Investors are very important in any business. It is important to know what their vision of the business is and to clearly understand their expectations. We are very privileged because our investors are extremely passionate about the business. They are willing to continue investing even in tough times. You feel much stronger as an organisation when you know that the business owner stands behind what you are doing.

How has your client base changed over the years?

There has been a dramatic change in business mix, because I do remember my times in St. Petersburg 10 years ago and more tourists came from other parts of the world then today. Chinese were a minority group, nowadays they make up about 70% of the tourists. Over the past two years, the biggest growth in clients is from Asia. At the same time, we can see over the years a slight drop in clients from the US and from Europe. This is not always connected to sanctions, and to the political environment, it is to do with the fact that China is growing, people are getting wealthier, more people have the opportunity to travel. At the Radisson Royal we have an increased number of Russian guests, so domestic travel will definitely play an important role in the future. We also see a tremendous growth in the use of our hotels inside Russia by Russians. By people, for example, who are looking for weekend escapes. A trip to Europe, because of the rouble devaluation, has become much more expensive than it was two or three years ago.

So Russia is still growth market?

Many companies said — let’s keep away from Russia, and they moved out or minimised their operations here. We as a company still believe in Russia. It is an emerging market and only 1% of all hotels are internationally branded here. In the UK over 60% of UK hotels are branded. The 59% gap between 1% and 60% is the potential growth. We are the largest international hotel group in Russia, we have good relations with our investors, so why wouldn’t we continue? The Q2 financial report of Carlson Rezidor Hotel Group, our management company, still lists Russia as one of the growth drivers for the company’s success and my personal business outlook is very positive.

You are now settled in Moscow?

It depends always what you expectations are.

What were your expectations?

I knew all about this place before I moved here, I knew that Moscow is a vibrant, but very hectic city. Everybody is always extremely busy and you also can see that it’s a money driven place. People come here to earn money to build a better life. I have travelled around other parts of Russia and I would not imagine myself living anywhere else but here. I am very privileged.

Don’t you get tired of the constant stress and rush?

I could take more. I am used to work; I am here every day for at least twelve hours. For me this is not a problem. I love it. The life/work balance I have today works well for me and my family. For other people it might not be the right thing. My oldest daughter goes to school; my little one soon to kindergarten and my wife enjoys all the advantages Moscow has to offer. Even though I can’t image myself retiring here, when you are energetic and young it’s a great place to live and work.