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Iconic memories

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As the Warsaw Marriott hotel approaches its 30th birthday, the global group that went on out on a limb to open it all those years ago is still going from strength-to strength in the region. We caught up with Janusz Mitulski, the senior director of development for Marriott International responsible for the company’s expansion in the CEE region (specifically Poland, the Czech Republic, Slovakia, the Baltic States and also Ukraine) to find out all about the ongoing expansion plans for its many brands

Anna Pakulniewicz, Eurobuild CEE: I see that Marriott is now expanding in a big way in the Baltic States.

Janusz Mitulski, Marriott International: Yes, indeed. When I joined company in 2015, Marriott had no representation in the Baltics. Today we have three operating hotels there: one in Tallinn – the Telegraaf Hotel, which is part of the Autograph Collection, while the other is the 190-room Courtyard by Marriott in Vilnius, along with the recently opened 239-room AC by Marriott in Riga, which is a conversion of the former Albert Hotel. In addition we have a Moxy hotel under construction in Kaunas, which is likely to be the first Moxy to open in the Baltics.

What’s happening in Ukraine?

We opened our first hotel in Ukraine last year – Aloft Kiev, which is in a very good location in the city centre, close to the stadium. In terms of the development pipeline we can see the potential for bringing our brands to the three main cities – Kyiv, Odessa and Lviv.

What are you working on? What projects have you got planned?

We are very busy developing our large pipeline of projects in this region. As a rule we don’t publicly discuss our deals until everything is finalised, the contracts are signed and the investor is ready to announce the project.

What’s your development strategy then?

Our expansion is based on both franchise and management agreements. There is also a lease option through some of our franchisees.

How does a project typically unfold? What’s the most important part of the development process?

Each hotel project begins with discussions over the brand options, based on the building’s location, facilities and the plans and expectations of the investor. For example, does it wish to build and retain the hotel or sell shortly after its completion? Does it want to manage the property directly or through a third party, or does it plan to engage an external operator on a lease contract basis? We offer solutions for every option. Another important aspect is that investors generally come to us well prepared. They often engage hotel advisors, or have former hotel managers on their teams who support them in an advisory role. So for such cases a lot of initial work has already been done. This speeds up the whole process.

Do you have brands that you are now more likely to promote, which you want to develop faster, or is it only the investor’s own choice?

The choice of brand typically emerges following a thorough reflection on the project with the investor. Forcing solutions is not the way we work. As a company, we have a very wide portfolio of 30 brands. These brands operate across the select-service segment, typically limited service mid-market hotels, and full-service upper upscale hotels. In the select -service segment our brands include Moxy, Courtyard by Marriott, AC by Marriott, Four Points by Sheraton and Aloft. We also have a global leader in the extended-stay segment – Residence Inn by Marriott. In the full-service segment our portfolio includes such iconic brands as Marriott Hotels, Sheraton Hotels & Resorts, Renaissance and Le Méridien. Alongside these, which are a big advantage, we also have two full-service collection brands: Tribute Portfolio and Autograph Collection. The Collection brand enables the hotels to operate under their own unique brand identity, but to still pull into the power of Marriott International’s infrastructure, including our standards, sales systems and our world-leading travel programme, Marriott Bonvoy. The Collection hotels have their own unique character, both in terms of their interiors, architecture and also in the F&B offering. When investors wish to pursue their dreams, for example by transforming an existing building into a hotel, we support them in this process. The number of Autograph Collection hotels currently in operation and in the pipeline is significant. The brand, created just ten years ago, already boasts 166 operating hotels and another 80 signed and under construction. This demonstrates the dynamic momentum and success of the Autograph Collection, which is, in this respect, a true industry leader.

What about the competition?

We are concentrating on our development strategy, approaching each project individually. In the hotel sector everything is determined by the location and nature of a property’s facilities. In this respect we take a lot of care in analysing the projects in close detail. Opportunities can arise through different sources: this could be directly through investors – but sometimes advisors, architects or lawyers are our initial contact point.

There have been a large number of mixed-use projects in recent years. What are the reasons for this? Is this growth of mixed-use also reflected in your portfolio? How many projects of this kind do you have? What are your important projects in Poland and the CEE region? And is such a hotel in a mixed-use project better than one in a stand-alone building?

We have been certainly keeping an eye on the growth in demand for mixed use-projects. Hotels are becoming part of multifunctional facilities, where the dominant functions are offices or retail, sometimes also with a residential component. This trend can stem from the master plan for a city, or from building conditions imposed on an investor by planning authorities that require them to create various functions within one development. A second factor is that investors themselves are beginning to diversify the risks of a project by creating multifunctional buildings. Hotels operate differently than offices or retail. If you want to be in a triple-A location in the city centre, then very often the hotel has to be part of mixed-use project. In our region, app. 25–30 pct of all hotel projects form part of multifunctional complexes. An example of this is the recently opened Moxy Hotel in Koneser – the former vodka distillery in the Praga district of Warsaw, which is located next to a Google campus and surrounded by shops and restaurants. Courtyard by Marriott in Katowice is a further example, as it is part of the Altus building; likewise the Courtyard by Marriott in Gdynia is a cohesive part of the Vastint office complex. Also currently under construction is our first dual-branded hotel in Poland – Courtyard by Marriott and Moxy Hotel Szczecin, where the two hotels will be part of the large mixed-use Posejdon building. Of course, multifunctional buildings are also challenging. The challenge is down to the fact that the various functions of the building are interlinked and the hotel has its requirements regarding positioning within the complex, incorporating guest access and delivery routes, which need to be separated. This is why it’s very important that we engage our specialist architectural team at an early stage. Our global design team is extremely experienced and can assist the investor in finding effective solutions. Moxy Warsaw Praga is a great example of creativity. As we look out from the inner courtyard, the retail area is located on the ground floor. The hotel’s entrance area is located on the underground level, which has been achieved by digging out the surrounding basement area to allow daylight in and easy access. Viewed from the inner courtyard, Moxy’s public space is subterranean; however, from the side of the shopping street the public space is almost on the ground floor level, only slightly set into the foundations. The hotel rooms are above the shopping area. This creative solution came as a direct result of the collaboration between the owner’s team and our architectural experts.

You mentioned two Autograph Collection hotels currently under construction in Poland. Where will they be?

We like to open Autograph Collection hotels in unique places and currently have two projects in Poland: in Kraków and Warsaw.

So when are these two Autograph Collection hotels set to open?

Both projects are currently at early stages of construction and both are in listed historic buildings. We have to take care when restoring old walls and old finishings. The construction process can sometimes hit unexpected hurdles during the adaptation of old buildings. That’s why they typically require longer renovation and construction periods than new-builds. But it’s worth it – as I’m sure these hotels will be unique.

And what other features will they have?

Our project investors are the only ones who can unveil this information.

So when will the first one open?

We will have to wait about two more years, because as I mentioned, with such structures you can’t predict exactly what’s going to happen during the construction stage. On the topic of historic buildings, I would also like to highlight our other brand – Tribute Portfolio. This is a brand with a rich, independent spirit and great flexibility when it comes to gastronomy and services in general. A Tribute Portfolio hotel could have a very traditional restaurant, or it could also be a themed restaurant. This could be Thai cuisine, Italian, a steak house… the investor has total freedom in this regard. It’s important that the property tells its own story, that it has its own unique character that can be tied in to the hotel’s name, design style and F&B offering. A recently opened example of a Tribute Portfolio hotel is Hotel Katajanokka in Helsinki, which is a former prison building. In today’s market it’s important to stand out, and we can see that many travellers are looking for something unique, something with an individual touch. We predict that our Collection brands will grow in coming years, especially in Europe, where we face existing historic urban zones that often have no space for new buildings. Tribute Portfolio allows you to adapt, to incorporate a hotel into the existing fabric of a city.

Does the Marriott network already have brands in the region that could still enter Poland? Ritz Carlton? Bulgari?

At the moment, nine of our brands operate in Poland, a hotel for a tenth brand is under construction, and one more is waiting to start construction. We would like to see Tribute Portfolio and Aloft Hotels being launched in Poland in the near future. We have a Luxury Collection Hotel in Warsaw and one in Prague – the question is whether Ritz-Carlton or St. Regis hotels might open in such locations. Luxury facilities require strong markets, where high prices are achievable, where we have airports providing many intercontinental flights and where we find branches of the largest investment banks. In my opinion we will start to see new luxury brands entering the market in the coming years. Investors will catch on to this trend as they see the fulfilment of high average prices. We have more than 20 brands available across Europe. Globally, Marriott International has 30 brands in its portfolio. Our brand portfolio is our biggest asset. Today’s hotel business is about creating experiences. This is what guests are looking for, and the combination of our world-class brands with the once-in-a-lifetime experiences on offer to members of the Marriott Bonvoy Moments programme, mean that we have the ability to give our guests around the world lasting memories.

Twenty years of hospitality

Janusz has been active in the hotel sector for almost twenty years, during which he has gained extensive strategic and operational experience in the growing Polish and CEE hotel markets. A graduate of the faculty of law and administration at Adam Mickiewicz University in Poznań, he also earned an MBA from the University of Economics in the same city. He was employed for seven years by Qubus Hotels, where he was the general manager of two hotels, before becoming the sales and marketing director of the chain in Poland. He was later made a partner of Horwath HTL’s hotel consulting team in Poland, before joining Marriott International in March 2015 to develop the group’s brands – both through franchises and management – in Poland, the Czech Republic, Slovakia, the Baltic States and Ukraine. Janusz is a Member of the Royal Institute of Chartered Surveyors (MRICS).

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