Lodging in the Hamptons

Last year you announced the opening of nine new Hampton by Hilton hotels. Where will they be located? Magdalena Sekutowska, Hilton Worldwide: We have nine Hampton by Hilton hotels under preparation or construction at this time. These are in Gdańsk Oliwa, Gdańsk Old Town Łódź, Lublin, Kalisz, Poznań, Warsaw’s Mokotów district, Oświęcim and Jelenia Góra. It is worth noting that apart from these Hampton hotels there will also be two new Hilton Garden Inn hotels – one in Szczecin and the other in the Mazury region. The majority of these will be opened in 2018 and some in 2019.

Are these eleven hotels the total of what Hilton Worldwide is planning to open in Poland in the near future? Or will you develop something more?

These are all the plans we can share right now. Contracts have been signed related to these projects.

The vast majority of the plans are for the Hampton by Hilton chain. Why?

Hampton by Hilton is an economy product in our portfolio, so they are considerably cheaper to construct. Hampton hotels are being developed on markets where prices are not exorbitant and yet allow hotels to generate healthy rates of return. We are planning many more such products than luxury projects, such as Hilton hotels. The construction costs for one Hilton hotel is the same as for the construction of three Hampton hotels. This shows that the Hampton brand could enter markets where room prices are considerably lower.

Where else do you see this growth?

In different locations across the country. In Warsaw there is still room for a few more Hampton hotels. Another could be built in Kraków, next to one that is already in operation, and we are planning two more in the TriCity. Our analysis shows that there could be more than one hotel of a given brand in each large city, even though everything of course depends on the dynamics of the given market. We are also opening Hampton hotels in new locations, such as Kalisz and Oświęcim. These are completely new markets where there are no other branded hotels.

And will you also be developing luxury brand hotels in Poland or the CEE region, such as a Waldorf or a Conrad?

There is a chance, but I do not see such a possibility for this at this point because the price, I mean the average daily rate, is too low for such a project to generate an adequate rate of return. However, you never know. I think that there could such an opportunity in one of the large cities – Kraków, Warsaw or Gdańsk.

A Raffles hotel is being developed in Warsaw by Accor. This probably complicates matters?

If such a hotel manages to stay afloat on the market it would be a good sign. Price is most important in the luxury segment and it has to be high – a minimum of EUR 200 per room or even higher is actually desirable. This is due to the investment expenditure on such hotels being very high, which is then represented by the room prices. If such a hotel is successful, it would be a very good test for the market. It could then turn out that there is still some room for such products of our own.

And what about the DoubleTree by Hilton or Hilton brands? Will more of these be developed here?

We are of course interested in the development of the entire port- folio, but you need to take into consideration that these brands are more expensive concepts – full service hotels that will not work on just any market. Such a hotel could not be built in Oświęcim, but we have not ruled out such an option in some other large city or another tourist market where there is great demand.

And what about a conference hotel, such as the DoubleTree by Hilton in Łódź?

We are not planning such hotels at this time, but we continue to consider different kinds of products, including new DoubleTree or Hilton hotels. We are also concentrating on two new brands, Curio and Canopy, which are also characterised by higher prices. Curio is suitable for historical concepts and for existing hotels that require the support of the chain and the Hilton system. These are also hotels that require renovation and a new concept or a combination with a recognised brand. Canopy, meanwhile, is a lifestyle brand and another quite expensive concept.

So this is not likely to be developed in Poland or Central and Eastern Europe?

I think that a Curio will be opened in Poland quite soon. In about a year or two, in one of the large cities.

About 10 pct of all your projects in continental Europe are located in Poland. Isnt this quite a lot?

Poland is one of the largest countries in Europe and in fact it still has too few hotels in comparison with other countries, particularly those in Western Europe. We are developing intensely and we can see the sustained need for new hotel openings, particularly those of a high international standard. In 2007 we opened our first hotel in Poland – the Hilton in Warsaw – and we currently have 14 hotels in operation and eleven under construction.