2009 - CRE

31
#06 (112) / 16–31.03.09
| Calendar |
| : Interview |
| Cover Story |
| Investment |
now­in­the­middle­of­the­crisis.­Because­
it­means­that­when­the­crisis­is­over­(and­
no­crisis­will­last­forever)­this­hotel­will­
already­be­up­and­running­and­really­set­
up­to­take­care­of­all­the­services.­On­the­
other­hand,­those­who­have­stopped­their­
new­projects­or­refurbishment­projects­
will­have­to­start­them­again­once­the­cri-
sis­is­over.­So­this­is­really­a­longsighted­
strategy­to­build­a­hotel­now,­rather­than­
stop­and­wait,­as­the­hotel­will­be­able­to­
accept­increased­business­when­the­mar-
ket­returns­rather­than­not­have­opened.­
Do­you­think­the­Russian­hotel­market­is­
interesting­right­now­compared­to­the­
European­market?­Some­experts­say­the­
European­market­is­more­attractive­now­
given­the­high­political­risks­in­Russia?
I­think­the­Russian­market­is­just­as­
interesting­as­the­European­market­and­in­
some­ways­even­more­interesting­because­it­is­
underdeveloped­compared­to­Europe.­Russia­
needs­more­hotels­–­not­necessarily­in­the­five-
star­segment.­Ours­is­a­four-star­hotel­and­it­
can­be­in­high­demand­on­the­Russian­market.
What­are­its­main­advantages?
Location­and­the­decor­which­could­
not­be­better­even­in­a­five-star­hotel­
as­the­Monarch­Centre­Hotel­is­being­
constructed­and­finished­to­the­highest­
standards.­­This­means­our­guests­will­get­
value­for­their­money.
Does­that­mean­you­may­count­on­a­higher­
return­on­your­investments?
In­a­crisis­you­have­to­charge­your­
rates­in­accordance­with­the­market.­We­
have­an­advantage­in­that­we­are­starting­
off­this­business­in­a­crisis,­rather­than­
the­other­way­round:­trying­to­maintain­
high­rates,­which­everybody­is­doing­now,­
especially­in­the­low­market­segments.­
Businesses­try­to­maintain­their­rates,­
rather­than­dropping­them.­You­may­
hear­discussions­about­new­value­added­
offers,­about­adding­something,­some­
extra­services.­­Though­it­is­very­difficult­
now­as­everybody­is­under­pressure.
What’s­the­average­percentage­of­the­rates­
drop:­20%­or­may­be­more?
It­is­different­from­market­to­market­and­
from­period­to­period.­Some­markets­are­suf-
fering­more,­while­others­look­more­buoyant­
and­robust.­Yet­everybody­is­generally­dis-
tressed­worldwide,­under­enormous­strain.
Do­you­think­the­Russian­hotel­market­
lacks­good­quality­hotels?­If­yes,­then­in­
what­segments?
It­certainly­does,­I­think­there­are­not­
enough­three­or­four­star­hotels­in­Moscow.­
When­business­returns­more­hotels­will­be­
needed,­especially­in­the­three­and­four-
star­niche.
Does­that­mean­that­the­five-star­market­is­
somewhat­overheated­already?
Yes,­I­think­there­are­sufficient­hotels­in­
the­five-star­market.­Now­there­is­a­need­to­
develop­more­hotels­in­other­segments.
Do­Marriott­hotels­experience­a­drop­in­
demand­on­the­part­of­corporate­clients­and­
do­you­feel­the­demand­is­migrating­towards­
lower­segments?
The­demand­has­dropped,­of­course.­
There­is­still­business­though,­but­you­
have­to­look­for­it­harder.­International­
companies­do­not­allow­much­travel­in­
a­crisis­period.­Every­company­is­trying­
to­save­their­money­and­the­demand­has­
dropped,­especially­in­the­higher­segment.­
This­­means­rates­have­also­dropped,­since­
everybody­tries­to­attract­whatever­clients­
are­still­available.
What­do­you­have­to­do­now­as­a­manager­in­
order­to­get­things­going?
It­is­necessary­to­save­money­by­cut-
ting­expenses­wherever­possible.­But­
you­need­to­do­this­without­affecting­
the­guest­experience.­Because­once­
guests­start­noticing­you­may­lose­your­
business.­Of­course,­you­always­have­to­
save­money­but­this­is­not­always­done­
on­a­rising­market.­There­are­always­ways­
of­being­careful­about­how­you­spend­
your­money.­To­begin­with,­you­can­be­
careful­about­your­staffing.­You­need­
not­hire­more­staff­to­replace­those­
leaving,­but­you­may­not­need­to­neces-
sarily­lay­people­off.­And­employees­can­
help;­they­are­now­willing­to­perform­
their­duties­more­diligently.­You­can­
look­at­all­your­expenses­throughout­the­
hotel­because­during­good­times­this­is­
not­always­done.­There­are­always­ways­
to­save­money.­There­are­certain­admin-
istrative­procedures­and­paperwork­
that­must­be­done­in­order­to­keep­you­
informed­on­everything­done­at­a­hotel.­
But­the­costs­for­these­can­be­cut.­For­
example,­it­is­possible­to­cut­down­the­
number­of­paper­copies­issued­within­
the­hotel­for­information­purposes,­
or­eliminate­paper­copies­entirely­by­
sending­the­information­electronically.­
Menus­and­other­information­can­also­
be­sent­to­customers­and­event­planners­
electronically.­Forecasted­occupancy­
can­be­looked­at­and­hotel­floors­can­
be­closed­to­save­money­on­electricity­
for­lights­or­air-conditioning­systems­
which­do­not­necessarily­have­to­work­
all­the­time.­In­other­words,­you­need­
your­building­to­be­maintained­properly,­
as­this­is­very­important,­but­there­are­
methods­to­cut­expenses­whilst­still­
maintaining­the­standards.­If­a­floor­
is­closed­then­savings­can­be­made­in­
the­cost­of­staff­who­would­normally­be­
required­for­cleaning­that­floor.
Is­there­also­a­drop­in­business­tourist­
and­regular­tourist­flows­right­now?
Well,­a­lot­of­people­come­to­Moscow­
for­tourism.­This­year­their­number­may­
drop,­especially­as­far­as­business­tourism­
is­concerned,­but­I­cannot­tell­you­for­sure­
as­I­am­not­currently­in­this­market.­I­am­
sure­groups­will­come­but­they­have­a­lon-
ger­lead­time­then­the­corporate­market­­
from­when­they­are­planned­to­when­they­
arrive.­Groups­often­plan­their­visits­a­
long­time­ahead.­
With­what­type­of­tourists­will­your­hotel­
be­most­popular?­Whom­do­you­see­as­
your­clients?
Well,­the­target­market­segments­are­
wide­and­include­the­corporate­segment,­
businessmen­and­tourists­because­the­
location­is­very­good­indeed.­The­hotel­
is­just­minutes­away­from­Byelorussky­
train­station­which­will­be­the­station­
for­trains­to­and­from­Sheremetyevo­air-
port.­And­it­is­very­close­to­Moscow­City­
and­to­the­Exhibition­Centre.
So­do­you­think­location­is­really­important?
Yes­it­surely­is.
What­other­factors­are­important­for­a­hotel­
project­to­be­a­success?
Close­proximity­to­the­shopping­centre­
and­an­office­block­is­a­big­plus.­Visitors­will­
come­to­a­shopping­and­business­centre­and­
this­will­mean­more­business­for­a­hotel­when­
it­is­just­next-door­and­at­their­disposal.
It­will­be­possible­to­work­together­
and­organize­joint­promotions­–­a­good­
synergy­indeed.­­A­good­surrounding­area­
is­also­important.­The­Renaissance­Moscow­
Monarch­Centre­has­good­surroundings­with­
a­small­park­nearby­so­this­is­a­very­nice­area­
and­a­metro­station­and­bank­offices.­The­
hotel­also­has­an­excellent­conference­cen-
tre­with­11­meeting­rooms­­and­a­large­pillar-
less­ballroom­which­combined­have­a­total­
space­of­1500­sq­ms.­There­is­also­a­superb­
two-storey­executive­lounge­on­floors­15­
and­16­that­offer­marvelous­views.­
What­is­the­percentage­of­the­hotel’s­pro-
ceeds­from­renting­such­facilities­in­the­
total­revenue?­Will­you­be­able­to­raise­
enough­money­from­renting­these­facilities?
You­may­rent­a­conference­with­rooms­or­
without­rooms.­A­return­can­be­not­so­high­
in­the­beginning­because­of­the­crisis­but­it­
will­build­up.­It­will­take­some­time.­Large­
European­companies­will­certainly­use­this­
space­for­their­meetings.­­The­space­can­be­
split­so­there­can­be­different­combinations.
How­are­you­going­to­promote­your­hotel?­
Maybe­you­are­thinking­of­some­marketing­
campaign?
There­will­certainly­be­a­special­opening­
offer.­It­is­done­everywhere­else­in­the­world­
in­order­to­attract­people.­We­will­look­at­the­
market­and­offer­the­best­rates­possible­to­lure­
more­people.­You­have­to­look­at­many­things.­
Good­service­24­hours­a­day­is­very­important.­
People­will­return­when­they­see­the­service­is­
good.­This­is­how­you­build­up­the­occupancy­
and­cash­flow­to­the­owner’s­satisfaction.
Where­do­you­find­your­personnel­and­how­
do­you­solve­your­HR­problems?
A­couple­of­years­ago­there­was­a­scarcity­
of­good­personnel­on­the­market­and­it­was­
very­difficult­to­hire­good­people.­This­was­
different­from­the­labour­market­of­ten­years­
ago­when­nobody­left­their­employment­­
and­people­treasured­their­jobs.­Now­it­is­
much­better­because­of­the­crisis.­A­lot­of­
skilled­people­have­already­applied­so­it­is­
much­easier­now­to­recruit­good­people­for­
the­hotel.
Do­you­train­your­personnel?­Is­training­
really­important?
Training­is­everything­in­our­business.­
We­always­train­our­personnel­and­we­train­
good­trainers­who­can­then­train­newcom-
ers­to­make­this­process­continuous.­And­
it­has­been­a­very­rewarding­experience­for­
me­to­work­with­Russian­people­during­the­
last­10­years,­because­they­are­really­willing­
to­learn­and­are­very­enthusiastic­about­
what­they­do­unlike­their­Western­peers.­In­
Europe­there­is­often­a­lack­of­­enthusiasm­
but­here­people­try­to­offer­the­best­service­
they­can.­It­is­important­for­a­hotel­to­have­a­
soul,­apart­from­good­maintenance­or­a­good­
building.­And­enthusiastic­personnel­and­
good,­cordial­service­are­indispensable­for­
this­to­happen.
Who­are­your­main­competitors­on­the­
local­market?­Do­you­think­Russian­brands­
can­seriously­compete­with­Marriott­in­the­
near­term?
Well,­I­think­in­a­way­everybody­can­be­
our­competitors­and­such­successful­Russian­
brands­as­Intourist­and­Heliopark­can­easily­
compete­with­us­on­an­equal­footing.­
When­do­you­think­the­hotel­market­may­
start­recovering?
Already­now­we­see­some­encouraging­
signs.­I­think­later­this­year­and­next­year­
more­people­will­come­on­business­visits­and­
stay­particularly­at­quality­three­or­­four­star­
class­hotels.­
­­ The­demand­has­dropped,­of­course.­There­is­still­business­though,­but­you­have­
to­look­for­it­harder.­International­companies­do­not­allow­much­travel­in­a­crisis­
period.­Every­company­is­trying­to­save­their­money­and­the­demand­has­dropped,­
especially­in­the­higher­segment.­This­­means­rates­have­also­dropped,­since­everybody­
tries­to­attract­whatever­clients­are­still­available.