To take flight once more

The hotel industry in Europe was hit particularly hard by the global crisis, with the RevPAR index plunging by much as 35 pct across the continent. Things have, however, already started to change

Starting a conference by citing recent reports on the condition of the hotel industry in Europe might not be the best idea when you have a crowd of participants who would rather listen to some postive news. The good thing about this approach, however, is that once you have got the scary numbers out of the way you can end the conference with something more promising. After an extremely challenging 2009, this year the bad mood 
– or a more realistic one, if you like – has not gone away.

According to one study, only 2 pct of industry players in Europe believe that the hotel sector is set for growth in 2010. By comparison, in 2009 the figure was 37 pct. According to the same study by 
DLA Piper, 55 pct of hotel executives expect hotel rates to recover to their pre-crisis levels by 2012 at the earliest. Therefore, are we being too impatient in asking: “Is the worst over?”

In the first panel, moderated by Janusz Mitulski, development manager of Horwath HTL, an apt metaphor to describe the state of the market was chosen by Daniel Bilak, a partner and CEE head of hotels and leisure at CMS Cameron McKenna: “It reminds me of a duck that is about to start flying. The market is trying to lift itself out of the mire – it is not in the air yet, but it is trying to take off. The sentiment is improving,” he claimed. The other panellists – Frans-Jan Soede, managing director of Vienna-based Hotels Asset Management, Marek Dąbrowski, vice-president of the Chamber of Commerce of the Polish Hotel Industry, Magdalena Sekutowska, development director for Eastern Europe and Poland of Hilton Worldwide, and David Herijligers, member of the board of Louvre Warimpex Development – agreed that during 2010 further corrections in the region will take place. Meanwhile, there is still a lot of work to be done. With business travellers in particular tightening their belts, budget and economy hotels are now perceived by an increasing number of developers as a crisis-proof alternative. The industry in Poland has to cope with another major challenge – the government’s proposal to increase VAT to 22 pct. “We as an industry should lobby against such a potentially fatal proposal,” Marek Dąbrowski noted.

“We are not going to meet the expectations for 2012 in terms of the number of tourists in Poland, but the positive thing is that the share of tourists out of the total number of hotel guests is increasing,” – is how Dorota Malinowska, hospitality consultant at Cushman & Wakefield, concluded her presentation. She welcomed Iva Trifonov, general manager of the Sheraton Sopot Conference Center 
& Spa, Christian Henkemeier, general manager of the InterContinental Warsaw, and Dr Krzysztof Łopaciński, president of the Institute of Tourism, to a panel devoted to identifying the main sources of hotel guests. “At the end of the day, we can’t please everyone and we have to concentrate on one core group of clients. We are all forced to compromise in order to generate revenue – but this doesn’t always work,” said Iva Trifonov. “When it comes to MICE we are not exactly the most obvious choice, as much worse affected markets – such as Spain and Portugal – are more competitive,” Christian Henkemeier added.

Turning to the competition between hotels, inviting a well-known architect – or “starchitect” – to design the hotel could certainly help, agreed Guy Dittrich, Belgium-based hotel marketing consultant and independent hotel commentator, Michał Kuś, director of Aedas Architects, and Sean Clifton, associate director of Jestico + Whiles, during the next panel discussion. The example of the Lalala arthotel in Sopot, however, shows that sometimes international practices can be successfully replaced by artists. “All I did was to ask a couple of friends to create a room where they would like to live for three months,” related the owner of the Lalala, Piotr Zastróżny, explaining the idea behind the eight extraordinary rooms at the internationally-acclaimed hotel.

On the next panel, Tomasz Janczak, business development manager of Concept Media, Daniel Łukasiewicz, managing director of Hoobi-Hotel Online Business Intelligence, Michał Świgost, sales and marketing manager of Qubus Hotel, and Tomasz Olejnik, brand manager of Brandometr, discussed how cyberspace could help hotels to increase their revenues. 
Facebook today is so much more than a social media site, the participants agreed, as an increasing number of hotel operators are using it for business. “It’s all about the message the hotel is sending and the reviews it gets online. On the other hand, stars as an indicator of quality are losing currency,” believes Michał Świgost.

The internet could be a means of increasing revenue, but when it comes to financing, developers still have to go to a more traditional source – the banks. Are they any more eager to lend them money at the moment? “We have been talking to investors recently – which is a sign that we can finally see the light at the end of the tunnel. 
Investors are gradually coming back,” – was the opinion of Wojciech Szybkowski, partner for real estate and construction at CMS Cameron McKenna, in the final discussion, which was moderated by Marek Dąbrowski and which also featured Christian Fojtl, CFO of Warimpex, Jerzy Miklewski, president of Projekt Hotel, and Theodor Kubak of Union Investment Real Estate.

At the end of the conference there was no evidence of any gloominess at the  InterContinental hotel in Warsaw. And we should take that as another positive sign. ν (MP)