A head start
By October next year PUHiT will have 20-25 one to two star hotels receiving guests under its 'Start' brand in Poland's major cities and is aiming to establish itself in customers' eyes before the big names arrive.
"Everyone says that the one and two star sector has a big future in Poland but the ratio of investment to revenue is still not attractive enough for most chains," says Andrzej Wojcik, vice president of PUHiT. "The big players are waiting for the occupancy rates to be higher."
The launch of PUHiT's Start venture will involve neither refurbishment nor construction of new hotels, however. The brand will instead be adopted by existing private hotels in the low-cost sector, whose standards of service, management and marketing will in turn have to be upgraded. There will be no development of new stock, according to Wójcik, because "at this point the one and two star sectors are oversupplied. In the first the rates are below 30 percent and in the second it's 32 percent. We need rates of around 45 percent for this market," he adds.
Wójcik believes that Start can tap into the growing demand from business travelers for cheap, short term accommodation. But an obstacle that he could face in attempting to achieve this might be that Start won't be offering a standardized product. Whilst quality of service and value for money are essential to attract and keep custom, an identifiable presence on the street is also integral to the success of a brand, one could argue. Start, admits Wójcik, "is not like Accor where you start the chain with the same design. But the standards of the rooms, breakfast and service are guaranteed at a certain level."
In Wójcik's view foreign investors will bide their time for two years before entering the budget market, which will give his chain the chance to gain an important advantage. "We want to secure our position during this time, so when the foreign chains arrive it will be much more difficult for them to lure away customers, who, we believe, will be loyal to our prices and offers. The foreign operators will have to charge higher prices." He maintains that the Campanile brand, run by Groupe Envergure, which charges zł150 for a bed for the night will not be able to sustain this price in the long term. "They will have to increase it to zł180 in six months' to a years' time," he says.
Michael O' Hare, partner at Horwath Consulting in Budapest, acknowledges that the low-cost sector is the one to watch in this region but also that domestic operators are set to make strides in the market. "I think you are going to see more and more evidence of locally-based brands in this region," he says, adding that his company has just opened an office in Moscow, precisely because of the strength of the budget market there.
"Everyone says that the one and two star sector has a big future in Poland but the ratio of investment to revenue is still not attractive enough for most chains," says Andrzej Wojcik, vice president of PUHiT. "The big players are waiting for the occupancy rates to be higher."
The launch of PUHiT's Start venture will involve neither refurbishment nor construction of new hotels, however. The brand will instead be adopted by existing private hotels in the low-cost sector, whose standards of service, management and marketing will in turn have to be upgraded. There will be no development of new stock, according to Wójcik, because "at this point the one and two star sectors are oversupplied. In the first the rates are below 30 percent and in the second it's 32 percent. We need rates of around 45 percent for this market," he adds.
Wójcik believes that Start can tap into the growing demand from business travelers for cheap, short term accommodation. But an obstacle that he could face in attempting to achieve this might be that Start won't be offering a standardized product. Whilst quality of service and value for money are essential to attract and keep custom, an identifiable presence on the street is also integral to the success of a brand, one could argue. Start, admits Wójcik, "is not like Accor where you start the chain with the same design. But the standards of the rooms, breakfast and service are guaranteed at a certain level."
In Wójcik's view foreign investors will bide their time for two years before entering the budget market, which will give his chain the chance to gain an important advantage. "We want to secure our position during this time, so when the foreign chains arrive it will be much more difficult for them to lure away customers, who, we believe, will be loyal to our prices and offers. The foreign operators will have to charge higher prices." He maintains that the Campanile brand, run by Groupe Envergure, which charges zł150 for a bed for the night will not be able to sustain this price in the long term. "They will have to increase it to zł180 in six months' to a years' time," he says.
Michael O' Hare, partner at Horwath Consulting in Budapest, acknowledges that the low-cost sector is the one to watch in this region but also that domestic operators are set to make strides in the market. "I think you are going to see more and more evidence of locally-based brands in this region," he says, adding that his company has just opened an office in Moscow, precisely because of the strength of the budget market there.
