How did Hilton’s business evolve last year in financial terms?
In general, 2006 was the best year ever this hotel had. As in 2005, last year was a strong year in terms of demand. We had the highest revenues and the highest profits. In revenues we grew roughly 8 per cent and in profit more or less the same, respectively 7.8 – 8 per cent. We had a different business mix than the year before so a little less occupancy, respectively approximately 72 per cent but, since we pushed up the rates, the average room rate was higher. The foods and beverages operations were very successful and we also registered all time highs in terms of business in the restaurants.
To what extent did the EU accession perspective drive tourists’ interest to 5 stars hotels?
Bucharest is not a tourist destination; it is mainly a business one. So, when we speak about tourism in Romania, Bucharest barely exists. A lot of business people come to Bucharest because of investments and privatizations. The accession to the European Union certainly will have and already did have a positive impact on business. And this impact does not necessarily translate into business growth because we are already at a high level. Our hotel – and this goes for the other hotels with whom we are competing – is fully booked Monday to Thursday in general, but we have availability during the weekend. We have 272 rooms and during the week, once they are full, they are full. So, we can only work on the rate and this was outstanding for last year and will be also for this year. This year we also have more business people, now that Romania is an EU member. Certainly, investors are keener to invest here because they are more confident in terms of legislation and jurisdiction. This certainly has an effect on us and it is tangible already, but it can not really grow our business much any more.
Is Bucharest hotel market mature? How much room is there on the 5 stars market for the new comers?
It depends how one would define mature. A full hotel is a good hotel, let us say. Bucharest is a growing market and I am sure the market could digest 1-3 more five stars hotels. Certainly now, if another ten hotels come on the market this would not be beneficial. And this has been seen in other destinations of Eastern Europe. Warsaw for example, 5-6 years ago had too many hotels and the market was nearly collapsing because the demand did not grow. Here, we expect the demand still to grow but not in double-digits terms. It is definitely a solid market. We are doing business, we are successful, we are happy, our customers are happy so I would consider it being a mature market.
The four-five stars market revolves around approximately 3,000 rooms now. Its growth beyond maturity absolutely depends on how the country is developing. For instance, we have the opportunity to hold conventions or large meetings at the People’s Palace but it is not a professional convention centre. If at one point Bucharest had a convention centre where it could host events for 2,000-3,000 people, with exhibition space around it, than yes, we definitely would need 1,000-2,000 more hotel rooms. Then Bucharest would become a competitive destination for Prague or Budapest for hosting this kind of events. But these days Bucharest is not a convention city so there won’t be any events, consequently we do not need more hotels.
And the same goes when you look at tourism. I have been living in Bucharest for one year and a half now and I think it is an extremely interesting city which has a lot to offer for people who live here and also for visitors. But, unfortunately, Bucharest and Romania have a bad image in Western Europe or in the rest of the world. And it is the job of the government, of authorities and it is also our job to promote both, but we have restricted funds and abilities so we have to synergize.
The EU accession certainly has a positive effect, there is more media attention on Romania, there is a Romanian Commissioner in Brussels and whenever you now see a map of the EU, Romania is a part of it and it is psychologically getting closer to people. Moreover, with the open sky now, traditional airlines can operate more flights, low-cost carriers are already coming in, but we still need to market Bucharest and Romania as an attractive destination.
|