Hotels call for conference center to attract business

By : Robert Wylot

    Conference call: Warsaw hotel managers want to see international conference facilities to bring in corporate customers.

   The Warsaw hotel market is close to saturation and the sector urgently needs to find an alternative source of revenue if many new hotels are going to survive the current economic gloom and hotel glut, hotel managers said.

   Many hoteliers said that what the capital lacks is an international-standard conference center to pull in corporate clients. Hotel managers said Warsaw would receive a huge boost to its image as a corporate destination if such facilites were built. They said the knock-on effect would mean more trade and fewer vacant hotel rooms.

   “We receive inquiries from conference organizers, but we have to reject them because of the huge nature of the event,” said Marek Rajski, general manager of the Forum Hotel in Warsaw. “The biggest of them have plans for 2,000-2,500 attendees.”

   Conference facilities in Warsaw are small by international standards and based almost exclusively in hotels. Le Royal Meridien Bristol this year opened two conference rooms with a combined capacity for just 130 guests and the Sheraton Warsaw Hotel & Towers recently opened a 1,200 square-meter conference facility.

   But despite building their own centers, most hotel managers would rather see a much larger facility – large enough to put Warsaw on the regional map. A conference center with room for several thousand people would also mean more guests for hotel rooms and restaurants. “A big center wouldn’t pose a threat to us as small conferences will stay in hotels anyway,” Rajski said.

   Warwick Gunning, sales and marketing manager of the Sheraton, agreed. “We have accommodation to cater for large groups, so all we need now is a venue,” he said. Gunning said the eight-12 new hotels that are due to be built in Warsaw during the next two years risk going out of business unless a conference center is built.

   Warsaw’s hotel industry is based on Monday to Thursday traffic so a conference center would drive the demand up during the weekends, said Gerard Greene, an analyst at the London-based Hotel Valuation Services. “Warsaw needs more leisure business to push hotel occupancy rates over 70%,” he said.

   As Central Europe’s leading market and financial center, Warsaw urgently needs to catch up with other regional cities such as Berlin, Prague and Budapest, which already have international-standard conference facilities.

   “Warsaw is the best Central European location for a big conference center, as it is becoming the financial heart of Central Europe,” said Jerzy Guz, vice mayor of Warsaw’s Gmina Centrum. He added that most leading financial institutions locate their regional headquarters in Warsaw rather than in Prague, Budapest or Berlin.

   Poland would never be able to compete on the global market until a large conference center is built in Warsaw, Gunning said. “Numerous conferences go to Prague, Budapest and other cities that have the infrastructure for it,” he said.

   The Palace of Culture and Science (PKiN), Warsaw’s tallest building and Stalin’s 1950s legacy to Warsaw, serves as the city’s premier venue. “When organizers ask about a venue, we recommend PKiN, but not everyone is satisfied with it,” Forum Hotel’s Rajski said. “It needs to be upgraded.”

   Gunning agreed, saying PKiN is big, but lacks modern facilities. “You can’t call it a conference venue,” he said.

   Although all hotel managers agree that a conference center is needed, no one has come forward yet to fund the project. Most hoteliers are putting pressure on city authorities to finance construction. “No hotel chain is eager to invest in a conference center,” Rajski said. “They’re looking to the city authorities.”

   For its part, the city plans to build a $1.5 billion conference center close to PkiN in the next five years. The project is expected to cover 650,000 square meters. “The investors in that project will be obliged to erect public sites as well, including a concert and conference center for 5,000 people,” vice mayor Guz said.

   Gunning, however, is unconvinced that the city will push through with the plans in the near future. “A conference center is a large investment and the return is slow, so companies aren’t going to rush to build it,” he said.

   Guz said that no private investor will want to finance a conference center alone, but he said that the project can be feasible as the center will be a part of a major investment. “Profits from other facilities in this project, including an exhibition center and four skyscrapers can outweigh the cost of erecting a conference venue,” he said. Guz added that if the construction is delayed, it will not be due to the cash-strapped government’s reluctance to pull out funds but due to procedural obstacles. “Whether the five-year deadline is kept or not depends mostly on how successful potential protesters will be in hampering the investment on formal and land ownership-related grounds,” he said.