Orbis drops anchor on the Baltic

“Orbis’ strategy is the dynamic development of its hotel chain over the next few years, mainly through franchises and management. We will be encouraging owners, investors and operators to cooperate with us because they will have all the advantages of a recognisable brand, a good reservation system and any help in terms of management as part of this cooperation. Within the next three years our chain should gain app. 30 hotels as part of its so-called asset light strategy – on the basis of franchises or management contracts. We hope to cooperate with the owners of existing hotels and those which are only to be built,” explains Małgorzata Morek, the franchise development director of Orbis.

Ninety the target
There are currently two hotels operating under Accor brands in Lithuania – Ibis Kaunas Centre (125 rooms) on the basis of a management contract, and the Novotel Vilnius Centre (159 rooms), which operates under a lease contract. The Mercure Riga Centre hotel is to be opened in mid-2014 in Riga and will offer 143 rooms in a historic tenement house built in 1901. “The facility will operate under a franchise format,” adds Małgorzata Morek. However, this is not the only hotel to be opened in the Baltic states. “We are currently negotiating two franchise contracts with investors in Lithuania and Latvia,” says Małgorzata Morek. The company does not yet want to reveal any details of the negotiations, and will only do so after the contracts are signed. At the end of 2015 the group is expected to have 90 hotels in Poland and the Baltic states. A total of 62 hotels are currently operating under the chain’s brands and are to be joined by another in December – a hotel in Wisła, which is close to receiving the Mercure brand.

What will be taken under Orbis’ wing?
“Seven hotels that are to function under our brands are currently under construction. Four Ibis Styles hotels are being developed in Poland (in Nowy Sącz, Białystok, Siedlce and Wrocław), a Mercure in Bydgoszcz, and a combo-hotel (Mercure and Ibis Styles in Sosnowiec). According to the planned schedule, they will welcome their first guests within the next few years and will offer a total of over 700 rooms,” reveals Małgorzata Morek. In addition to this, the hotel company is continuing its plan of separating the property ownership from management. “We believe that this is the right way and this is how we are planning to develop our chain. Hotels earmarked for sale will be offered to investors and we will conclude so-called franchise back-contracts or management contracts while the property is being sold. One example of such a transaction is the sale of the Mercure hotel in Zakopane to a hotel company from the Bachleda investment group – we signed a long-term franchise agreement as part of the transaction. The eventual structure of the portfolio of the Orbis hotel group will be: 30 pct own hotels and 70 pct asset-light, that is, under franchise or management,” says Małgorzata Morek.