Gas monopolist hopes to turn hotels into valuable properties
One of them is the Polish Oil and Gas Co. (PGNiG). In addition to being the state monopolist for gas distribution, PGNiG owns 17 hotels around the country.
And in many ways, PGNiG isn't so much a new entrant as an old player who is looking to redefine its position, or current lack of one, on the market.
PGNiG's hotel holdings are a holdover from communist times, when the company, which employs about 50,000 workers, offered hotels, pensions and vacation spots for its staff.
Now, with company vacations at pre-ordained "resorts" a thing of the past, PGNiG is trying to find a new market for its properties. "Currently the activity (hotel operation) is not profit oriented," said Andrzej Jackowski, managing director of Geovita, a PGNiG division that will be transformed into a subsidiary within the next 12 months. "We are moving in this direction to make it a profitable activity."
Geovita's role will be to take over the hotels and make them profitable ventures, said Jackowski, who before coming to PGNiG 18 months ago worked as guest service manager at the Bristol Hotel.
Geovita already controls 13 PGNiG hotels and will eventually assume control of the other four owned by the company. The hotels are located in popular resorts including Zakopane, Krynica, Ladek Zdroj in the mountains, or Mrzelyno, Dzwirzyno, Dabki at the seaside. Geovita, which in most cases also owns the land the hotels are on, estimates that its assets are valued at about $20 million, Jackowski said.
Currently the 13 hotels taken over by Geovita have 1,500 beds and employ 300 workers, Jackowski said. But Geovita's main customers still seem to be PGNiG workers.
"The hotels serve PGNiG employees and they still should serve these employees, but on economic principles," he said. Geovita charges about zl. 1,000 for a two-week hotel stay including food, which is an average price, Jackowski said.
But Geovita realizes it can't rely on PGNiG alone as in the old days. Instead, especially during the low season, it will have to work to attract more customers including businesses, conferences and seminars, Jackowski said.
As part of the battle for these clients Geovita wants to extend its operational period from traditional summer vacations to a year-round schedule. "This will allow us to keep prices low and win clients," Jackowski said. Geovita charges conference organizers about zl. 60 per day, per person including meals, Jackowski said.
The standard of Geovita's hotel facilities can be compared to three-star hotels, but in some cases improvements are needed, he added.
Geovita plans to upgrade its hotels through self-generated investment or cooperation with partners, Jackowski said. But the latter is the more likely route as Geovita has no funds of its own.
"We operate just above a break-even level," he said.
PGNiG isn't planning on selling off the hotels in Geovita's portfolio. "We are capable of winning the market on our own," Jackowski said.
But that doesn't mean the privatization of Geovita; and the sale of all its hotels as one unit is out of the question. "If it is privatized it will be only to increase capital for investment," he said. "It won't be a sale just to get money."
Diving in
WOW Wisla, a state-owned swimming pool operator, is hoping to raise up to zl. 15 million ($4.3 million) to modernize one of its indoor pools in Warsaw. If the projects moves ahead, it could mean the capital will finally get a modern, indoor public swimming pool.
Wisla is looking to three sources for funding to upgrade the pool, which is located on ulica Inflancka in the northern part of central Warsaw. These sources are the Centrum Gmina budget, the Warsaw voivodship and state lottery operator Totalizator Sportowy. All three institutions have indicated their support for the project, said Janusz Wallewein, general director of WOW Wisla. "We will apply for funds that were earlier declared though not fully confirmed," he said. If the money comes through, Wisla hopes to start upgrading the pool complex next year.
Wisla plans next month to finalize architectural plans for a new building to house the pool, Wallewein said. The 1,600 square-meter pool is currently located within a 3,000 square-meter complex under a bubble, said Ryszard Wasikowski, who manages the pool. The first part of upgrading the pool would call for a more normal structure with walls and a roof. This project would be completed by winter 1999, if funding is in place.
Wisla would then look to the project's second phase, dividing the one existing pool into four new ones. This project is expected to be completed by the summer of 2000.
The upgrade doesn't include renovation of showers and locker facilities because of limited funding possibilities. Even so, if all goes according to plan the Inflancka pool could become one of the most modern public facilities in the city. The only other pool development currently planned is for the Warszawianka sport clubs, which should open this fall.
The only other pools planned for the capital are connected with schools or sports clubs that are not fully open to the public.
Companies have been reluctant to build pools because they haven't proved profitable, he added. And the Inflancka pool, even when renovated, isn't expected to buck this loss-making trend.
"This won't be profit-oriented," Wasikowski said. "It will serve the local community."
Wisla, which operates five aging pools in Warsaw, said that admission fees to its pools barely covers maintenance, Wallewein said. Wisla also receives subsidies from the Warsaw voivodship, which covers 7% of the company's maintenance budget.
In brief:
The German developer Von der Heyden Group last month sold its yet to be constructed Skorupki office building on ulica Skorupki in central Warsaw to Bankowy Fundusz Gwarancyjny. The 6,000 square-meter building, which will have 4,000 square meters of office space, was sold for an undisclosed price, said Monika Debicka, a broker with Knight Frank Nieruchomosci, which is the agent for the building.
The deal calls for Bankowy Fundusz Gwarancyjny to pay for the building in installments that correspond with the progress of construction. This method of payment helped bring down the final price, said Debicka. "It (the final price) doesn't include financing costs," she added.
Construction of the five-story Skorupki building is expected to finish in November 1999.
And in many ways, PGNiG isn't so much a new entrant as an old player who is looking to redefine its position, or current lack of one, on the market.
PGNiG's hotel holdings are a holdover from communist times, when the company, which employs about 50,000 workers, offered hotels, pensions and vacation spots for its staff.
Now, with company vacations at pre-ordained "resorts" a thing of the past, PGNiG is trying to find a new market for its properties. "Currently the activity (hotel operation) is not profit oriented," said Andrzej Jackowski, managing director of Geovita, a PGNiG division that will be transformed into a subsidiary within the next 12 months. "We are moving in this direction to make it a profitable activity."
Geovita's role will be to take over the hotels and make them profitable ventures, said Jackowski, who before coming to PGNiG 18 months ago worked as guest service manager at the Bristol Hotel.
Geovita already controls 13 PGNiG hotels and will eventually assume control of the other four owned by the company. The hotels are located in popular resorts including Zakopane, Krynica, Ladek Zdroj in the mountains, or Mrzelyno, Dzwirzyno, Dabki at the seaside. Geovita, which in most cases also owns the land the hotels are on, estimates that its assets are valued at about $20 million, Jackowski said.
Currently the 13 hotels taken over by Geovita have 1,500 beds and employ 300 workers, Jackowski said. But Geovita's main customers still seem to be PGNiG workers.
"The hotels serve PGNiG employees and they still should serve these employees, but on economic principles," he said. Geovita charges about zl. 1,000 for a two-week hotel stay including food, which is an average price, Jackowski said.
But Geovita realizes it can't rely on PGNiG alone as in the old days. Instead, especially during the low season, it will have to work to attract more customers including businesses, conferences and seminars, Jackowski said.
As part of the battle for these clients Geovita wants to extend its operational period from traditional summer vacations to a year-round schedule. "This will allow us to keep prices low and win clients," Jackowski said. Geovita charges conference organizers about zl. 60 per day, per person including meals, Jackowski said.
The standard of Geovita's hotel facilities can be compared to three-star hotels, but in some cases improvements are needed, he added.
Geovita plans to upgrade its hotels through self-generated investment or cooperation with partners, Jackowski said. But the latter is the more likely route as Geovita has no funds of its own.
"We operate just above a break-even level," he said.
PGNiG isn't planning on selling off the hotels in Geovita's portfolio. "We are capable of winning the market on our own," Jackowski said.
But that doesn't mean the privatization of Geovita; and the sale of all its hotels as one unit is out of the question. "If it is privatized it will be only to increase capital for investment," he said. "It won't be a sale just to get money."
Diving in
WOW Wisla, a state-owned swimming pool operator, is hoping to raise up to zl. 15 million ($4.3 million) to modernize one of its indoor pools in Warsaw. If the projects moves ahead, it could mean the capital will finally get a modern, indoor public swimming pool.
Wisla is looking to three sources for funding to upgrade the pool, which is located on ulica Inflancka in the northern part of central Warsaw. These sources are the Centrum Gmina budget, the Warsaw voivodship and state lottery operator Totalizator Sportowy. All three institutions have indicated their support for the project, said Janusz Wallewein, general director of WOW Wisla. "We will apply for funds that were earlier declared though not fully confirmed," he said. If the money comes through, Wisla hopes to start upgrading the pool complex next year.
Wisla plans next month to finalize architectural plans for a new building to house the pool, Wallewein said. The 1,600 square-meter pool is currently located within a 3,000 square-meter complex under a bubble, said Ryszard Wasikowski, who manages the pool. The first part of upgrading the pool would call for a more normal structure with walls and a roof. This project would be completed by winter 1999, if funding is in place.
Wisla would then look to the project's second phase, dividing the one existing pool into four new ones. This project is expected to be completed by the summer of 2000.
The upgrade doesn't include renovation of showers and locker facilities because of limited funding possibilities. Even so, if all goes according to plan the Inflancka pool could become one of the most modern public facilities in the city. The only other pool development currently planned is for the Warszawianka sport clubs, which should open this fall.
The only other pools planned for the capital are connected with schools or sports clubs that are not fully open to the public.
Companies have been reluctant to build pools because they haven't proved profitable, he added. And the Inflancka pool, even when renovated, isn't expected to buck this loss-making trend.
"This won't be profit-oriented," Wasikowski said. "It will serve the local community."
Wisla, which operates five aging pools in Warsaw, said that admission fees to its pools barely covers maintenance, Wallewein said. Wisla also receives subsidies from the Warsaw voivodship, which covers 7% of the company's maintenance budget.
In brief:
The German developer Von der Heyden Group last month sold its yet to be constructed Skorupki office building on ulica Skorupki in central Warsaw to Bankowy Fundusz Gwarancyjny. The 6,000 square-meter building, which will have 4,000 square meters of office space, was sold for an undisclosed price, said Monika Debicka, a broker with Knight Frank Nieruchomosci, which is the agent for the building.
The deal calls for Bankowy Fundusz Gwarancyjny to pay for the building in installments that correspond with the progress of construction. This method of payment helped bring down the final price, said Debicka. "It (the final price) doesn't include financing costs," she added.
Construction of the five-story Skorupki building is expected to finish in November 1999.
