Martin: In Bucharest, hotels need to be filled over weekends

Peter Craig Martin, a 41-year old Brit, has taken over the management of Howard Johnson Grand Plaza five-star hotel in Bucharest for two years, after having worked in the Asian hotel industry for 15 years.

“During the first year, you get to know the market you are working on, the business environment. All the other strategic decisions are related to these coordinates,” explains Martin.

Martin says that there is still a minus as regards the Romanian hospitality industry (hotels, pensions, accommodation facilities).

Yet, he specifies, things will change once other new hotels are opened: there will be a rising need for skilled personnel that will lead to demands for higher salaries.

“As more and more hotels are opened, there will be rising demand for skilled personnel and a normal pressure as regards remuneration,” Martin stated. Though a large part of the people working in the industry prefer going abroad, where salaries are much bigger, investments in hotels operating on the domestic market are surging.

Howard Johnson hotel in Bucharest posted turnover worth 12.5 million euros in 2005, and Martin says he targets to boost revenues by at least 8% this year.

“There is solid demand for the hotel product, particularly from businessmen. Most of our revenues come from the corporate segment (businessmen staying in a hotel through a contract sealed between their company and the hotel),” explains Martin.

Against an average occupancy rate of 75% on the segment of five-star hotels, Bucharest is considered to be a business destination, rather than a travel one.

In the East, on the other hand, the average occupancy rate for hotels of the same category stands at 90%.

“The difference comes from leisure travel, which does not exist in Bucharest. Hotels still need to be filled during weekends in Bucharest,” says Martin. He specified that, in Asia, the solid flow of tourists is due to the high number of people travelling between different cities in the region.

“This will happen in Romania as well, travel between different East-European cities will grow,” he added.

“Bucharest five-star hotels offer a good product, which can be favourably compared with that of other cities in the region,” explains Martin.

Bucharest”s five-star hotel market saw over 100 million euros in revenues in 2005, being the segment where moves have a more powerful resonance compared with other segments of the industry.

“Profitability in our industry is a fluctuating notion in Romania, but is still much bigger than in Western states,” he says.

Martin anticipates several new hotels will be opened over the next two years, both on the luxury and middle segments.

Howard Johnson in Bucharest

* five-star hotel

* Derived turnover standing at 12.5 million euros in 2005

* Projects growth by at least 8 percent in 2006

* Has 285 rooms

* Boasts an average occupancy rate of 75 percent

* On the Bucharest five-star hotel market competes with another five hotels: JW Marriott, Anthenee Palace Hilton, Intercontinental, Crowne Plaza and Casa Capsa.

* Was opened at the beginning of 2005