The largest hotel complex in Romania, Grand Hotel Marriott, which required 180 million dollars in investments for building works, will be officially opened at the end of October.
Unfortunately, just like in the case of World Trade Center-Sofitel hotels, to which the Ministry of Finances granted a governmental guarantee although the Romanian state did not benefit from the respective business, the future Marriott investment in Romania received in its turn a governmental guarantee, in 1992.
Grand SRL is a joint venture whose shareholders are the Austrian group Ilbau Holding, with 55% of the stake, ONT Carpati with 30% of the shares and Overseas Alliance with 15%.
Marriott Group is not an investor in this transaction, as it only provides management for 30 years since the construction works begin.
Thus, the Romanian state, which is not one of the investors, accepted to guarantee a loan worth 116 million dollars, that the shareholders received from a banking trade union.
Two Austrian banks and six German banks managed by Erste Bank accepted to disburse amounts of the 116 million-dollar credit due in ten years, provided they obtain a government guarantee. “The governmental guarantee was required following the political instability of that time,” Radu Banu, the technical manager of Grand SRL companies, maintained.
Thomas Eder, sales and marketing manager of Marriott Grand Hotel, says that the governmental guarantee supported the idea that the Romanian project was a sound one. “We have already had enough trouble as the government was late with the signatures. If the guarantee hadn’t existed, we would have been out of business,” Eder explained.
The Grand will be the largest hotel complex in Romania, will span over 80,000 square metres and will have 13 floors. The Marriott five star hotel will have 402 rooms, three restaurants, reception rooms and complete facilities for organising conferences. In the owners’ opinion, Grand Offices represents “the best organised space in Romania, exclusively intended for offices.”
The complex will also include supermarkets, restaurants, bars, coffee shops, boutiques, travel agencies, a bank and a kindergarten.
Radu Banu believes that the hotel’s facilities match those of a genuine five-star hotel.
“We provide the latest standard facilities: connection to power sources and Internet through floor-integrated cables, high quality moquette and adequate mural finishing,” Banu states. Moreover, the entire building will be endowed with modern air-conditioning systems integrated in the ceiling. “Romania is a promising market for us and we have all the reasons to believe that the hotel will become profitable in maximum ten years,” Thomas Eder states. He believes though that the next two years will be the most difficult for the hotel unit. “This is the period when we have to win our clients’ trust,” he states. “For now, we are entirely satisfied with the way construction works have been conducted,” Marriott official states.
Eder recalls that six months ago shareholders were rather pessimistic about the moment when the hotel was to be inaugurated. “Now, more than 1,300 persons are working day and night in order to finish the construction. I am also amazed when I notice significant changes every day,” Thomas Eder states. The rest of the funds, up to 180 million dollars, were provided by Ilbau Holding, which came up with 36 million dollars, and ONT Carpati. Actually, the Romanian company made its contribution in kind, as ONT appraised at 28 million dollars the structure on which the hotel unit is built. “The share capital of the company amounts to 10 million dollars, out of which seven million in cash subscribed by foreign shareholders and three millions the value of the land in ONT Carpati ownership,” Radu Banu said. ONT Carpati is the Romanian beneficiary of the deal. Beside the 30% in the share capital, the tour operator will gain another 28 million dollars in ten years, as the value of the building structure is seen as a loan. ONT is a private company whose main shareholder is the Cypriot company Amtho Holdings Ltd.