www.business-review.ro Business Review | April 2 -8, 2012
FOCUS 7
Daniela Dumitrescu marketing manager, Radisson Blu Hotel
Meda Vasiliu director, sales and marketing, Marriott
Yann Marteau director, business development, Hilton
Sonia Nastase GM, Howard Johnson Grand Plaza Hotel
International chains flex commercial muscle…
dependent properties. “Everything depends on what added value they can bring. They can do it by location or services but in order to perform on the long term they need to offer added value through both location and services, because this market is based very much on word of mouth,” says Sebesanu. According to Toni Tatar, marketing and sales manager at Rembrandt Hotel, one of the main advantages of independent hotels is that they can make decisions internally. Plus, in general they have few rooms and this contributes a lot to the hospitality extended to their customers. “The majority of the services provided by an international hotel are standardized, while the flexibility of the services provided by a small one brings closeness to the customer,” he says. Finding a range of niche services and offering additional benefits compared with an international hotel could be a solution for an independent hotel to keep its market position and to face down the existing fierce competition. “Independent hotels are finding it hard to survive on the market now and each new brand that enters the local market takes from the market share of the independent players. They can create advantages like being more flexible or providing customized services,” suggests the CEO of Trend Hospitality. Elsewhere, Dumitrescu of Radisson Blu Hotel says that independent hotels can profit from leisure travel, because this segment needs authentic locations and different and original experiences. “Being less standardized, independent hotels can adapt more easily to the individual influences than the local branches of international brands,” she says. According to Tatar, another difficulty that independent hotels are facing at present is that their room rates are greatly shaped by the competition, including international hotels with a significant influence on the market. “For example, a three-star hotel will be forced to price itself below a five-star hotel even though the quality of services is not always reflected in the number of stars,” says the Rembrandt Hotel representative. He adds that the average occupancy rate at Rembrandt was 75 percent last year, while the turnover was about EUR 450,000.
In Sebesanu’s opinion, one of the mistakes that some independent hotels made was to cut their prices. “This is not good for the long term. It would be better to improve their services. Customers are sensitive to price but up to a limit. Guests won’t come solely because of the low prices if they don’t find the services they expect. When you have alternatives you need to be very careful about price sensitivity,” says Sebesanu. Asked whether independent hotels can become targets for other players,
Sebesanu says it could be possible only if they meet the standards for being affiliated. “Hotels are not evaluated like office buildings or residential with a price per square meter. A hotel is bought depending on its capacity for generating profits. It is about buying a business. That’s why transactions are more difficult and complex, especially for independent hotels that don’t have their accounts audited,” he adds.
Their management systems and expertise on other markets have helped international chains hold up against the difficulties of the current crisis better than independent players. They posted a smaller decrease and recovered more quickly. Sebesanu says an international hotel can also be traded more easily than an independent one because the buyer can have greater confidence that it has bought a feasible business. In addition it can attract financing more easily. Every detail counts, especially for the customers of a luxury hotel, because it’s the little things that make the difference. In addition, Dumitrescu says that the support of high quality management by the international chains, training processes for employees and regular audits can help hotels achieve high quality standards. Howard Johnson Grand Plaza Hotel in Bucharest, for example, is part of the international chain Wyndham Hotel Group, which has about 7,200 hotels in 66 countries around the world. So it benefits from the capitalization and standardization criteria and all the commercial and promotional advantages of the network. “Plus, many hotel chains have developed loyalty programs for their customers at group level through which they are encouraged to choose the same hotel brand on every trip, regardless of their destination,” says Dumitrescu. Vasiliu of the Marriott says that affiliation to a centralized reservation system managed by a specific chain in general keeps reservations over 60 percent. “Our main commercial advantage as part of a recognized international chain remains the strength of our distribution network which allows us to reach our consumers. From a product point of view chains are generally more geared towards business travel and on the Bucharest market they can better meet the needs of the traveler,” says Marteau of Athenee Palace Hilton Bucharest.
… while independents hang on Independent hotels across many markets can often perform better than an international chain hotel because of their superior location and services and a stable base of customers. For example, in the mountain areas of Austria and the South of France the majority of hotels are in-
anda.sebesi@business-review.ro