Outside demand tops restaurant billings for caterers in 1999
This past year has been another boon for caterers, so much so that many oufits are saying the business now doubles what they pull in from their traditional restaurants.
Part of the reason for the growth, caterers said, is increasing demand from Polish clients, which traditionally did not spend heavily on such services. At the same time, new restaurants, banquet halls and tower space in office buildings are giving party throwers a greater choice of location for their events, which is further spurring business. In years past, caterers had complained that a lack of adequate conference space and gathering halls limited the number of special events put on by companies, charities and the like.
"It really is the boom side of the business and there is no indication that it will slow down," said Richard Lyon, general manager of Warsaw's Marriott Hotel.
He said his hotel's revenue from catering services hiked 25% in zloty terms so far this year. Katarzyna Gontarczyk, public relations manager at the Sheraton Warsaw Hotel and Towers, said that at the bare minimum, 1999 had seen 50% growth in revenue from catering over last year's zl. 20.9 million ($5.97 million).
Lyon also said that catering was a bigger generator of revenue than restaurants, bringing in around double the amount. Andrzej Pierzchala, banquet manager at the Holiday Inn echoed this sentiment. "Catering is more profitable compared to restaurant sales," he said.
Galas, special events and conferences aren't the only source of new business, though. LOT Catering said it predicted revenue to grow 8-10% this year compared to 1998's zl. 80 million ($22.86 million). The increased sales come from new routes and larger aircraft used for flights to Poland as well as a greater number of charter flights, said public relations executive Joanna Patocka-Pollo.
Whether it's on the ground or in the air, almost every caterer on the WBJ's list this year saw a substantial rise in sales. (See the List, page 13)
Not all of it is glamorous, though. Sodexho, for example, concentrates more on the day-to-day running of an office building or company factory than on one-time special events, said Gilles Poirieux, Sodexho Poland's general director. While foreign clients include Citibank and Ericsson, as well as business centers such as Warsaw's Globe Trade Centre and Ochota Office Park, the company has also seen its roster of Polish clients expand this year, he said.
"More Polish companies are asking and putting in place a cafeteria for their employees," Poirieux said. "They are switching to a big company like us."
In the last year, Sodexho has signed 13 large, full-time catering contracts in Poland, and domestic clients include Bydgoszcz-based chemicals firm Zachem as well as pharmaceutical company Polfa. Two weeks ago, it also signed a catering and facilities management contract with the Supreme Court of Justice, Poirieux said. He would not say how much the deal was worth. LOT Catering also gained a large Polish client this year, the National Environmental Protection Fund (NFOS), Patocka-Pollo said. LOT will provide meals for the group's cafeteria.
Both firms do dabble in special events from time to time, but those events constitute only 10% of Sodexho's revenue in Poland, Poirieux said. The largest event Sodexho catered this year, he added, was the June celebration of the merger between refinery Petrochemia Plock and gas retailer Centrala Produktow Naftowych (CPN) to create oil giant Polski Koncern Naftowy (PKN). About 30,000 people attended the event, and Sodexho had around 300 people working around the clock to provide a vast array of food and drink at 120 different stands. "It was huge," Poirieux said.
Last week the company ran another PKN event at Warsaw's Teatr Roma for 1,000 people. While he refused to disclose how much Sodexho earned from the event, Poirieux said that the average banquet budget runs zl. 30,000-zl. 500,000, normally hitting the zl. 100,000 mark.
"We are extremely busy. We do two to three banquets a week; they are not small things," Poirieux said.
LOT Catering is also doing more special events, according to Patocka-Pollo. One of its most important events this year came in October with a picnic for a VIP party attended by President Aleksander Kwasniewski and 400-500 people for the opening of a reconstructed bridge over the Wisla river at Wyszogrod. The company also provided the catering for the LOT ground services' staff picnic, which had 1,000 guests. Patocka-Pollo said the cost of such an event depended on services required.
"If we had a picnic for 1,000 people with just bigos and zurek, it would be very cheap," she said. However, an average banquet with alcohol normally runs zl. 60-zl. 70 a head, she said.
Annual events and office openings now account for around 80% of the business that Holiday Inn pulls in, Pierzchala said. "The service is beginning to be more popular because a larger number of people better understand what catering is," he said. He said that the number of events the company had handled this year was up 30-40% from 1998.
While caterers are for the most part positive about the direction their business has taken, they are still somewhat concerned about the lack of appropriate venues for events in Warsaw. "We're really only looking at a choice of three to four locations," said the Marriott's Lyon.
To solve the problem, he said that many companies such as supermarkets and hypermarkets used their own premises for gatherings, cutting out the hassle of trying to nail down a hotel or restaurant location.
At present, the capital's prime location is Warsaw Technical University's Aula Hall, which has a maximum capacity of 1,400, Sheraton's Gontarczyk said. But caterers said that new, class-A office space that has come on line in the last 12 months, such as the Warsaw Financial Center and the Reform Plaza, would help alleviate the venue problem.
