Orbis erases Soviet-era past
Local hotel group Orbis has begun renaming all hotels in the chain as part of a franchising agreement with Accor Polska, a subsidiary of France's Accor. The agreement was signed last year and will give Orbis hotels Accor's brand names.
Through the agreement, Orbis has the right to use Accor's premier hotel brand names such as Ibis, Mercure, Novotel, Sofitel, Etap and Formule 1.
In January, the Panorama hotel in Wroclaw was renamed the Mercure Panorama, and the Forum hotel in Krakow was renamed the Sofitel.
Warsaw's Victoria hotel, on plac Pilsudskiego, has already been upgraded with $28 million and will be renamed the Sofitel in April.
"It's not a takeover, just a franchising agreement," said Ireneusz Weglowski, vice president of Orbis. Some 29 hotels will be renamed by 2004, including five that are already franchised under the Novotel brand. As part of the agreement to switch to Accor brand names, Orbis will have to modernize its existing hotels.
Weglowski said the company invested zł. 300 million ($73.2 million) modernizing the hotel stock last year and plans to spend the same amount this year.
The use of Accor brand names will help to rebuild the Orbis image, which is often associated with the communist era. Many hotels also need renovating. "Customers will recognize the international brand more," Weglowski said. He added that with the new names, the hotels will be included on Accor's international reservation system, which enables clients to book by e-mail. The managing director of Accor in Poland, Jean-Philippe Savoye, said the new names should also boost occupancy rates. Right now, he claims that the two Ibis hotels in Warsaw are doing very well, with occupancy rates of 80-90%.
In August last year, a consortium comprising Accor, developer Globe Trade Center and Deutsche Bank subsidiary Fic Globe Fund bought a 35% stake in Orbis, which is listed on the Warsaw Stock Exchange (WSE). Accor has a 20% share and is the largest single shareholder. The consortium paid zł. 578.6 million ($134.7 million) at zł. 35.5 per share. Six percent still remains with the state treasury.
Orbis is the largest hotel chain listed in Central Europe, with a market capitalization of $305 million.
Accor bought Warsaw's Mercure hotel from Orbis for $34 million in 1998. Besides franchising Orbis hotels, it's also constructing its own hotel brands. These include three Ibis hotels two in Warsaw and one in Lodz. A further six hotels are scheduled to open later this year; one in Zabrze and Czestochowa, and two in Szczecin and Krakow.
A new 250-room Novotel is opening in Warsaw next month on ulica Andersa. Savoye said the company plans to build another 10-20 hotels in major cities within the next five to 10 years. "There's a great deal to be done in regional cities," he said. He added that Warsaw will soon reach saturation point with the opening of the Hyatt and Radisson SAS project by Swedish developer Skanska. "That's why Hilton withdrew from Warsaw," he said. "The city has become a high risk for investors."
