Holiday Inn steps into a market that some feel is in danger of becoming overcrowded. Jan Lorincz |
"We welcome all competition," said Koloman Kollar, general manager of Bratislava's Hotel Forum, of Holiday's Inn arrival. "We like them to be here."
Lena Bakova, Holiday Inn's marketing manager, said her hotel has started sucessfully thanks to its international reputation with business people. "We are a business hotel," Baková added. "Our main competitors are the Hotel Forum and Hotel Danube, but they're both 20 percent more expensive than Holiday Inn."
Holiday Inn may not be Bratislava's newest competitor for long. Currently in the planning stage is a twenty-story, three-tower highrise complex in Bratislava's Nové Mesto, to be built by the Canadian developer, CEIC Holdings, at an estimated cost of $200 million. And a Belgian company, TEI Besix, won a tender last --- to rebuild the cavernous Hotel Carlton. A recent nationwide survey of 27 hotels by the Slovak Hotel and Restaurant Association, showing that hotels in Slovakia last year won an average profit margin of just 2.7 percent, cause some industry watchers to question how many hotels are too many for the market.
Market saturation
"Three large, four star-class hotels" in Bratislava are "okay, [but] I don't think we can develop the market" to accomodate more, said Wagih Khouri, general manager of Hotel Danube.
Khouri sees an advantage in the proximity of a well-known franchise such as Holiday Inn to his own hotel, however. "The Holiday Inn is very well-known internationally," Khouri told The Slovak Spectator. "I think that because of this, Holiday Inn will bring us business. The first time a businessman comes to Bratislava, he may reserve rooms at Holiday Inn, but the next time he might stay at our hotel."
"We're not afraid of competition," said Marta Herczegova, general manager of Hotel Perugia, "because we're a small hotel in the city center, with a domestic atmosphere like home."
Asked specifically what Hotel Perugia, a small but stylish 14-room establishment, offers that Holiday Inn can't, Herczegova said the hotel serves business travellers who find the personal touch elusive. "We're investing in new carpets and interior decor, and changing the restaurant menu to include international cuisine and Slovak specialities, while lowering the average price," she said. "In the future, we want to fill the hotel with guests on Saturdays and Sundays [in addition to] during the week."
"I don't think new luxury hotels will damage our business," said Ivan Banie, general manager of Hotel Tatra just blocks from the Hotel Forum. "They will have to concentrate on tourists to fill such a big hotel."
Underscoring his confidence in the future, Banie noted Hotel Tatra's on-going renovation. "We're renewing our rooms, installing air-conditioning, changing the key system to a card system, and renovating the restaurant," he said, adding that by next year, "we'll have room service and secretarial services."
"There's room [in the city] for more good hotels," added Branislav Hronec, who manages Hotel No. 16. "We're making some money, but we are also always spending a lot of money. For example, last year we spent a lot of money on air-conditioning, anti-fire systems, interior decorating. We have many opportunities to spend money."
Poisťovňa's surprise loan
Holiday Inn benefitted from a 250 million Sk loan extended by an unlikely source: Slovenska Poisťovňa. Slovakia's largest insurance company set up a holding company called Slovkarpatia to handle its loan to Holiday Inn.
According to Stefan Szasz, director of Slovenska Poisťovňa's financial division, "Everywhere around the world there's a Holiday Inn. I think it's such a famous hotel that most people visiting Bratislava will recognize it. Before we invested in Holiday, [the real-estate developers] wanted to build a small, simple hotel, but we said we would back the project only if it were a big-name, top hotel."
"We didn't conduct any market research," Szasz continued. "We just wanted to build a hotel that would be there for [Slovenska Poistovna] in case we wanted it for conference space."
And the market? Said Szasz, "We think in Slovakia in several years the hotel industry will develop further, and there will be more hotels in Bratislava. At the moment we think there is no danger of running too many."
