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A hotel is a long-term investment

SLOVAKIA used to be limited in its range of both less and more luxurious hotels. That situation has changed with more four- and five-star hotels opening during the last few years while a number of other new hotels of various categories have just started welcoming guests or are preparing for their grand openings. The global economic downturn has put hotel managers under greater pressure to run their properties more effectively and to cut costs, but along with this they must keep services at the same or better levels to remain appealing to longstanding customers as well as new guests who have become much more price sensitive.

SLOVAKIA used to be limited in its range of both less and more luxurious hotels. That situation has changed with more four- and five-star hotels opening during the last few years while a number of other new hotels of various categories have just started welcoming guests or are preparing for their grand openings. The global economic downturn has put hotel managers under greater pressure to run their properties more effectively and to cut costs, but along with this they must keep services at the same or better levels to remain appealing to longstanding customers as well as new guests who have become much more price sensitive.

New hotels that are preparing to open soon include the Sheraton Hotel in the Eurovea development in Bratislava and the Kempinski Hotel in the River Park development below the castle hill, also on the Danube embankment. This will be the second Kempinski hotel in Slovakia, following the Grand Hotel Kempinski High Tatras which opened in Štrbské Pleso in May this year.

The Slovak Spectator interviewed Harald Nograsek, CEO of Verkehrsbüro Group, which recently opened the Austria Trend Hotel Bratislava, Jana Lehocká, managing director of Hotel Gate One in Bratislava, and Radúz Dula, general manager of Chopin Airporthotel Bratislava about the current situation in the hotel business. All three hotels opened their doors this year.



The Slovak Spectator (TSS): What challenges does a hotel face when opening during the economic downturn? Does this situation bring any positive features?


Harald Nograsek (HN): We have observed Slovakia’s promising economic development and its close economic ties to Austria. We defined Bratislava as one of the target cities for our expansion in central and eastern Europe (CEE). Of course, the worldwide economic crisis has had a negative effect on the hotel sector. However, we are noticing a slight economic recovery and we strongly believe in the midterm success of our commitment in Bratislava. Despite the difficult economic environment our group is going to continue its expansion in the CEE region. We are planning to expand our hotel portfolio in CEE and we also contemplate other projects in Slovakia.

Jana Lehocká (JL): Right now it is necessary for us to secure a high level of provided services, to be prepared to meet the requirements of guests and to work constantly on building positive images of the hotel. The economic downturn and the concurrent increase in hotel capacities in Bratislava, especially in the segment of four-star hotels, have brought huge pressure on prices from guests. A newly-opened hotel usually begins its operation with introductory prices which are not permanent. Afterwards, we need to very carefully consider our next price policy in order for it to be acceptable to guests as well as to further the operations of the hotel.

The positive feature of the current situation is that it teaches us to save operating costs, to use human resources effectively, to constantly watch developments in the market and to be active in familiarising our future guests about the hotel.

Radúz Dula (RD): A hotel opening has to be seen as a long-term project as well as a long-term investment. Additionally, we draw up our budgets by bearing in mind the current market situation. We opened our Chopin Airporthotel in Bratislava in June 2009. The prices for hotel rooms are below those of previous years and we must establish 3 to 4 times more sales activities than in past years to achieve similar results, as we also can see from our other properties.

With regards to any benefits from the downturn, we benefit as a three-star hotel from the price sensibility of our guests in comparison to four- and five-star hotels. And when seeking new employees, we are having a wider range of candidates for each position.



TSS: What are the differences and similarities with your hotel chain’s experiences in Slovakia and other countries?


HN: The Verkehrsbüro Group is Austria’s leading tourism enterprise. We can draw upon 90 years of experience in the hotel business and tourism. In the hotel field our portfolio encompasses 33 Austria Trend Hotels & Resorts with 10,000 beds. We focus on city hotels and have mainly four-star hotels in our portfolio and concentrate on the MICE (meetings, incentives, conferences and events) segment. We entered the Slovak market by establishing the Austria Trend Hotel Bratislava. The segment of business travellers is market-dominating in Bratislava. The market needs in Slovakia’s capital are overall similar to Austria and our sales and distribution force serves the same customer segments.

JL: The four-star Hotel Gate One is the first hotel in Slovakia to become a member of the international hotel alliance Preferred Hotel Group, which consists of five renowned hotel brands: Preferred Hotels & Resorts, Preferred Boutique, Summit Hotels & Resorts, Sterling Hotels and Historic Hotels of America.

Preferred Hotel Group clusters 700 independent hotels and resorts in more than 75 countries. The alliance is based in Chicago and maintains 28 sales offices worldwide. Hotel Gate One operates as part of the Summit Hotels & Resorts brand.

The alliance secures services in strategic marketing and trade, global distribution management, application of quality standards for services and consultations in hotel and revenue management.

Because Hotel Gate One is starting its operation only in December we will be able to juxtapose economic and operating indicators of this hotel with other members of the alliance only later.


RD: Our local market, especially Bratislava, is similar to the neighbouring capitals of Prague and Vienna even if these two other cities extended their room capacity during the last few years. A similar development has started already in Bratislava and is based on steady growth calculations for the years from 2000 to 2006. Taking into consideration the newest research and statistics, the market is actually back to the values from 2006 to 2007 even though several new hotel projects have been finished in Bratislava during the last two years. The result is that a smaller market is now shared by a greater number of hotels.

So the main target for us is to attract new markets and to develop additional services for our potential guests. As Chopin Airporthotel is a member of the international hotel group Vienna International Hotels & Resorts we are in a situation to benefit from their market presence.



TSS: Could you specify the expectations for your hotel in Slovakia?


HN: Our hotel’s exclusive proposition addresses business and leisure guests from Austria, Germany, Slovakia and the Czech Republic. We expect an occupancy rate of 50 percent in the first year of operation. The economic region of Bratislava with its 500,000 habitants is located only 65 kilometres from Vienna. Bratislava intends to get more congress business over the coming years. Therefore, we intend to have a strong position in the MICE segment by providing modern conference facilities in our new hotel. Furthermore, Europe’s youngest and emerging capital is an attractive destination for city tourists and cultural travellers. Bratislava’s historical centre with its Opera House and the Philharmonic is worth seeing.

JL: Our expectations are closely connected with the main characteristics of Hotel Gate One. Our hotel will fill a quite significant gap in the market for upper-standard congress premises which can provide bigger convention capacity in Bratislava. The newly-built Hotel Gate One is close to the business zone, the Bratislava airport and the largest shopping centre in Slovakia and has all the preconditions to draw in the Slovak capital all loyal clients of our brand, who are especially business persons and travelling sales representatives looking for quality and an internationally respected brand.

RD: After taking the current market situation into consideration we assume we will achieve our target for 2010, which will be above the results of the hotel’s opening year in 2009.



TSS: What products and services will you offer to distinguish the hotel from others in Slovakia?


HN: Our new four-star Austria Trend Hotel Bratislava with 199 rooms is becoming a tourists’ landmark in Bratislava’s old town. Our distinctive façade is visible from a distance. The postage stamps that are part of our façade are lighted at night and relate to the nearby historic post office. The new hotel leaves nothing to be desired: it has a great location at the start of the pedestrian zone, high-level architecture, modern conference facilities and a great panoramic view from our executive lounge on the top floor.

JL: Hotel Gate One is modern and stylish with 121 rooms. Its design differs from ordinary hotel-type accommodation facilities. Our congress hall has the largest capacity in Bratislava, has the most modern technical equipment and is an integral part of the hotel. Our most demanding clients have at their disposal Etage De Luxe – the top floor of the hotel, with luxuriously equipped rooms as well as an executive lounge. Most of our rooms are of upper-standard size – from 30 to 101 square metres. A high-speed internet connection is free in the guest rooms as well as in public areas of the hotel. And after a busy day, our guests can also relax in a wellness centre with a panoramic view of Bratislava.

RD: The hotel group Vienna International Hotelmanagement AG stands for ‘a statement of quality and service’ and is always interested in expanding the quality of its services. Examples are our recently launched cookbook, our wine book and our jazz/lounge music CD. In the recent past our hotel group has replaced world-known hotel management companies across Europe simply because it is more flexible than big chains.

The Chopin Airporthotel itself is strongly focused on business travellers, offering airport pickup, a non-stop restaurant, free parking and complimentary tea and coffee facilities in each room.


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