From Poland to London

Anna Pakulniewicz, ‘Eurobuild CEE’: What are your plans for the near future?

Rune Askevold, CEO, Puro Hotels: At the moment what we have is four hotels, in Wrocław, Poznań, Gdańsk and Kraków. Together they have 587 rooms. In 18 months we will have doubled this number with the addition of three projects and then we will have 1,094 rooms. We are building a 228-room hotel in Kraków, in Kazimierz district with a restaurant, a bakery and a café, as well as a spa, a garden and terraces. Puro Krakow Kazimierz will be opening next June. In autumn 2018 we will open another hotel, with 130 rooms, in Łódź. This will also have a restaurant, a tea shop a little separated from the hotel, a restaurant, a rooftop bar, a terrace and a spa with a view onto the city. In Warsaw, on ul. Widok we have a hotel under construction with 149 rooms and underground parking. This project is a little behind schedule as there were many formalities to complete. We have also had to strengthen the construction of a neighbouring historic building. In Warsaw our hotel will also feature a destination restaurant, which should also be popular with local people. And this is for us a very important part of our strategy – we want to change people’s thinking about hotel restaurants. We want them to operate independently and at the same time act as an ambassador for the hotel. In the Warsaw Puro there will be a spa centre in the basement and a rooftop bar with a nice view of the city centre, as the building will be slightly taller than the one that previously stood on the site. The Warsaw hotel should be ready in Q1 2019 and it will be our ‘flagship’ hotel.

Are there any other projects in the pipeline?

We are working now on a project on ul. Waliców in Warsaw, where we have bought a plot on the corner of ul. Grzybowska. The building is being designed by Kuryłowicz & Associates, while the interiors will be designed by New York based AvroKo. It will have app. 350 rooms. We hope to have the hotel ready by the end of 2020, but I know this is an optimistic scenario. We have also recently signed an agreement for a plot in a city we are not present in at the moment. But this is confidential for now.

Where else do you want to build hotels?

We actually would rather build three or four hotels in Warsaw than go out into smaller cities. We are also considering other developments on the Kraków and Wrocław markets. In Wrocław we want to have a much stronger presence and in Kraków we can have at least one more hotel – three would be good. We prefer building 150–250 room hotels. At the moment we are seeking different opportunities in these cities, but we are only interested in plots in the very heart of the city. We do, however, recognise that there is strong competition from residential and office developers. So this is not such an easy task, but we are working on it. In Warsaw we are looking at both Powiśle and the central part of Praga as possible interesting locations for Puro hotels. Currently we own all our hotels, but we might also consider leasing in the future, if the project is of a high quality and in one of the best AAA locations.

Do you only build hotels from scratch? Are you considering buying a building and converting it?

Until recently, we thought that we could only deliver our concept in newly constructed buildings that were designed purely for us. But we have also started to consider adapting old buildings. I think we could create something unique – and uniqueness is also part of our strategy. We have been looking at some of the properties up for sale, but what we have seen so far has either been too small or too expensive or didn’t have enough potential. We prefer to open hotels with a minimum of 130–150 rooms.

So what is essential to a Puro project?

The Puro concept has evolved a great deal between when we opened our first hotel in Wrocław and our recent opening in Gdańsk. We started off with a basic three-star product, but have now decided to concentrate on a full service four-star-plus product. And now, what I can say is that the Puro Gdańsk hotel has become the template for our future projects. But only in terms of amenities and the approach to a project – we do not have any strict manual in terms of design and architecture. The only thing that we want to follow is the rule that the architect is local, the interior designer is international with substantial experience and that we then introduce some beautiful artwork and photography from both local and international artists and designers. And we try to make the hotel building tailor-made for the specific location, giving it a sense of place. Our target group is usually individual travellers, both corporate and tourists. We are not so keen on having a lot of conference capacity, due to the fact that this might destroy the atmosphere of the hotel. And having a friendly and informal atmosphere is one of our stronger features. And although every hotel of the Puro chain is different, I think there are features that are typical for our hotels, so that one can recognise that it is a Puro hotel – and that could be, for example, the informal and friendly atmosphere, the approachability of our staff and that a guest can feel at home. We have deep Scandinavian roots, so ‘hygge’ forms an important part of our concept. And the technology we install in every hotel is always the same.

So apart from Warsaw, Wrocław and Kraków – where do you want to expand to?

First of all we have to consider whether and where the market exists in Poland for such high quality hotels as the one we have built in Gdańsk. One alternative could also be to launch another brand – maybe a three-star hotel brand for smaller cities, but we have no specific plans yet. For sure we are interested in Katowice. We are present in Poznań, Łódź and Gdańsk and we are happy with the presence we have in these locations. In Gdańsk there is already oversupply and Warsaw is close to this. In Warsaw there is another problem: a lot of apartments are being built and a huge part of these will be rented, unfortunately. In my opinion, the – and let’s give it this general name – Airbnb apartment market is a serious rival too and should be regulated in a better way, so that the business is fair for everyone.

How long does it take for a Puro hotel to break even?

I don’t think like this. We are in both the real estate and hospitality business. But we are long term investors and we know that in the long term the business will generate some good returns as the hospitality market in Poland continues to grow. And by having a very efficient and healthy operation, and a unique product, we also know that the value of our own properties will keep growing over time. So for the time being we are only focused on creating a superior hotel product and hotel brand. That’s our strategy. And if we succeed in that, I’m sure our investors will be more than happy at the end.

Are you planning to go international?

We are in no hurry to do this. We want to achieve a strong position in Poland, but yes, we want to go international. We could consider, for instance, Berlin or London. Our aim is to firstly build a brand that is very strong and well regarded by foreigners in Poland. We want people to perceive it as being at a high international standard, but also to recognise that it is from Poland. Initially, we were thinking that we could open hotels in Germany, in Leipzig, for example, and also in Bratislava, Prague, Budapest etc., but now we know that our hotels – like the one in Gdańsk, which is of five-star quality although officially it has four – can open in the bigger Western European capitals. But firstly, we have to open a hotel in Warsaw. It is easier to go from Warsaw to Berlin or London than from a regional city in Poland. But going abroad is not the main issue. Firstly, we want to develop in Poland and this will still take some time. And we are in no rush. We are here to stay and to build a great Polish hospitality brand that we can later go international with. I think our staff, guests and investors will all be happy to see that.

From Bergen to Warsaw

Rune Askevold is the creative and managing director of Puro Hotels, and the managing director of Norwegian real estate company Genfer Hotels, which develops and owns all the hotels operated by Puro Hotels. Rune started his career as a banker working for Dutch and German banks. In 2001–2002 he also held the position of investment director at Inship, previously the main shareholder of Qubus Hotels. He was also a director of Choice Hotels. He graduated from the Amsterdam Institute of Finance/INSEAD, as well as from Norges Handelshøyskole – the Norwegian School of Economics, and in politics from the University of Bergen