As the saying goes, perception is reality. That’s the rationale behind yesterday’s announcement of the formation of The Carlson Rezidor Hotel Group, the merging of two lodging giants—U.S.-based Carlson and European-based Rezidor—as a platform to go to market under one identity. Since the two firms have different ownership structures—Carlson is private, Rezidor is publicly traded with Carlson as majority shareholder—the arrangement only involves strategic and tactical maneuvers. The two companies will appear as one to owners, developers, investors and travelers, even though they’re separate legal entities.

“It’s not just the joint name that’s important,” says Thorsten Kirschke, chief operating officer of Carlson Hotels and president of Carlson Hotels, Americas. ”Where the rubber really meets the road is the level of commitment that goes along with sharing of the same name. The success will be in how the two organizations can accelerate their current collaborations from today onward.”

Indeed, the two companies have worked closely in recent years, especially since Carlson took a majority (50.03%) stake in Rezidor in 2010. Rezidor, which is in the top tier of hotel operating companies in Europe, Russia, Africa and Asia, was a role model for Carlson as it rolled out its Ambition 2015 revitalization project two years ago. That initiative aims to increase Carlson’s portfolio by 50% to 1,500 properties by 2015. Carlson even co-opted Reizdor’s Radisson Blu upper upscale hotel concept to reenergize its flagship brand.

The new entity will be controlled by a global steering committee co-chaired by Hubert Joly, Carlson’s president and CEO, and his Rezidor counterpart, Kurt Ritter. The group has a new logo and new website that launches Feb. 1. The new venture starts with five major priorities: global alignment and management of the brands, development of revenue generation engines, leveraging global purchasing opportunities, people development on a global basis and seamless communications to stakeholders.

Thorsten Kirschke, president of Carlson Hotels, Americas and COO of Carlson Hotels

“The revenue generation initiative started before we committed to a joint name,” says Kirschke. “We’ve already deployed $62 million in revenue management capabilities, structures, resources and technologies, and that’s aimed at generating incremental revenues north of $400 million for the systems.”

About half ($30 million) of that initial investment went to digital efforts, including mobile web, apps and home page upgrades as well as a vigorous social media strategy. Another $17 million was used to improve revenue optimization techniques. Tactics planned for the next three years includes programs in those areas as well as additional upgrades to the Club Carlson loyalty program.

For owners of Carlson properties in the U.S., Kirschke says the global footprint of the new company can bring additional business to their properties. Whereas a typical Carlson property in the U.S. gets 70% to 80% of its business from its own geographic region or elsewhere in the country, he believes the combined company “means a greater exposure to the global world of travel and a better opportunity to capture more of that intercontinental travel.”

With 1,319 properties open or under contract in 80 countries, the new company becomes the ninth largest hotel company in the world by number of rooms (209,000 at the end of 2011). Worldwide annual system revenues top $7 billion.

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