Hotel giant enters Polish market

Wyndham Hotel Group, the biggest hotel chain  in the world and the owner of as many as 7,100 hotels (592,000 rooms), is poised to enter the Polish market, starting with the launch of an economy chain under the group's  Super 8 brand. A minimum of ten motels under the brand are to open over the next five years, alongside Shell petrol stations, among other locations.
The hotel giant is being brought to Poland by Alex Kloszewski, partner and head of the hotel investment department of Colliers International, who knows the group very well having previously worked for it for ten years. This landmark development agreement for the Polish hotel market was signed by Mr Kloszewski and Erick Danziger, president of Wyndham Hotel Group, during the 2011 International Hotel Investment Forum conference, which took place in Berlin on March  7th-9th. Colliers entered into talks a year ago with the group, which provides the franchise rights to such well-known brands as Ramada, economy hotels Days Inn, Microtel,  Baymont, Howard Johnson, Travelodge, Knights Inn, Wingate by  Wyndham, Hawthorn and Wyndham, as well as the two-star Super 8 motels, which could possibly make their first appearance in Poland later this year.

Cosmopolitan make-up
Super 8 is the third biggest motel chain in the world with app. 2,100 facilities. However, thus far the chain has not operated in Europe - its first motel is to be built in Amsterdam, followed by those that are to open in Poland. Colliers is currently in talks with three potential strategic investors in the venture. The partners include two companies that have not been active on the Polish market so far: one from Belgium and the other from Israel. These firms are to be partnered with a Polish company from the construction sector. The final agreements are likely to be signed in June this year. The investors want to have exclusive rights to the chain in Poland, and have ambitious plans: they want to build 200 motels within ten years and are planning to go public on finishing the first 7-10 facilities. Colliers  International is also in negotiations with three companies (already present on the Polish market) for the management contract for the chain.

Pre-fab motels
A typical Super 8 motel will have around 80 rooms, while the biggest ones could even have 150. However, no spa centres or conference halls will feature in these two-star facilities. And instead of restaurants there will be small bars next to the reception areas. "There is currently a shortage of this type of product on the Polish market. Small hotels are being built by individual investors, however, but they do not have suitable brands, quality standards or reservation systems," claims Alex Kloszewski of Colliers International. Modules needed for the construction of the motels are to be manufactured in factories for half a year after which their assembly takes just one month. One of the three strategic partners of the chain is looking to take on the responsibility for the manufacture of these pre-fabricated elements. Thanks to such technology, the construction costs of an average-sized motel will amount to only  EUR 4 mln (EUR 35,000-40,000 per room). "One great  advantage of this product is the possibility of building hotels on land with only a ten-year lease period - a practice previously unheard-of on the Polish hotel market due to the high construction costs. But thanks to the modular structure, when a land-owner terminates the lease, it will be possible to move the motel to another plot. The cost of such an operation, which would only take 30 days, comes to around EUR 300,000," adds Alex Kloszewski.

Station-to-station
The first Super 8 will most probably be a flagship motel built in the capital city. However, most of the motels will eventually be located near main roads. "We are currently in negotiations with one of the key petrol station networks, which has hundreds of stations in Poland. Super 8 motels could be built next to some of them. For their construction, relatively small plots with areas of app. 1,700 sqm are needed, and these could be leased from the network on preferential terms. We should be signing such an agreement in the next few weeks," reveals Alex Kloszewski. According to our sources, Shell is the network which is being referred to; however, Colliers International refuses to confirm this. In one year app. 800-1,000 motel rooms could be built near roads and about 600 in well-connected cities.  Colliers International is also looking to identify locations for the other brands in the Wyndham chain, but no agreements have yet been signed in this regard. A year and a half ago the agency did grant two licences for the  operation of Ramada hotels, but the company which was supposed to build the hotels later withdrew from the project.
Zuzanna Wiak