DESTINATION REPORT BY CATHERINE CHETWYND
When the market does finally come back, it may be too late; it is time to invest ahead of the curve
POLES APART However, it looks as though Poland may have benefited from the turn away from Russia. “Poland is of greatest significance. It has a lot of big cities – Warsaw, Krakow, Poznan and the Three Cities – Gdansk, Gdynia and Sopot – and it is ripe for budget hotel development,” says Melvin Gold. Rezidor recently acquired a stake in German economy brand Prizeotel and properties in Eastern Europe follow. Hotel management company Hotels
Development Europe represents investors in Wroclaw, where a Doubletree by Hilton is opening as part of a Ð100 million project, which president Yossi Wircer describes as “probably a hotel icon, not only for the city but for the whole of Poland”. Also in the pipeline is a new Holiday Inn in Krakow and a Ð25 million luxury lifestyle hotel in the city’s centre.
“The hotel sector is quite busy,” says
banks unable to borrow and lend only at extortionate interest rates. Until then, Russians were among the
most dynamic investors abroad: there is Russian development money throughout Eastern Europe. They were more adventur- ous than Western investors because they already had a long-standing relationship with governments, businesses and the private economy, and understood the Eastern European market better. “Western investors still needed another
ten years to get the Cold War out of their head,” says PWC partner Nicolas Mayer. But investment has not ground to a halt.
“We are seeing hotel activity in Moscow, St Petersburg and in the far east of Russia, and in some regional cities as well,” says Rezidor’s Jenkins. “People do have some cash available and see that now is the time to invest because, when the market does finally come back, it may be too late; it is time to invest ahead of the curve.”
BUYINGBUSINESSTRAVEL.COM
And in 2013, IHG announced an agree- ment for the development of a number of Holiday Inn Express hotels in Russia, to be completed by 2019. It has already opened Holiday Inn Express Voronezh Kirova and Hotel Indigo St Petersburg Tchaikovskogo, introducing both brands to the country. Although average rates are “still fragile”, with both cities experiencing drops over the last year (HVI), Russia will be hosting the 2018 FIFA World Cup and is investing an estimated US$10 billion to develop infrastructure, which will attract business. However, the picture is not rosy. “Russia is going through recession and, with sanc- tions and the falling price of oil, there is an unfortunate set of circumstances,” says HVS’s Perret. “Also, the country’s long- term prospects are difficult to assess: what happens post-Putin, who comes next and what is this person going to do? The country has become very nationalistic and that doesn’t make investors feel comfortable either.”
Wircer. “Marriott-Starwood, IHG, Hilton and Accor all have development people or offices in Poland and are working very aggressively to get contracts. Poland is ap- pealing because Russia isn’t any more – it’s very simple; and because only 25 per cent of hotel rooms are branded, there is great potential for branded hotels to come into the market.” In addition, a Marriott Courtyard is under construction in the business district of Warsaw and a Holiday Inn is due to open in 2018. “After that, development would probably be in secondary destina- tions such as Gdansk, Poznan, Szczecin, Krakow and Wroclaw,” says Wircer. “Krakow is very attractive to investors. It is the most visited city in Poland and tourism is very strong.”
AND FARTHER AFIELD...
Choice Hotels is also looking to expand its mid-market hotel offering into primary and secondary cities in Poland as well as into Balkan capital cities. “As a pure franchisor,
BBT JULY/AUGUST 2016 83
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100