Qubus targets special economic zones for hotel-chain expansion
Qubus Hotel Management has acquired three properties in Western Poland as a part of a strategy to develop its hotel chain in the country's special economic zones.
The Norwegian-owned Qubus, which already operates hotels in Gorzow Wielkopolski and Zielona Gora, bought four older hotels in Walbrzych, Glogow, Legnica and Zlotoryja, with an eye to renovating and renaming the properties into Qubus hotels by the end of next year, said Steffen Okland, president of Qubus Hotel Management.
"We're developing in connection with the special economic zones," Okland said.
The zones, set up in the mid-1990s in 17 areas across the country, offer investors a 10-year tax holiday followed by another 10 years in which companies pay 50% tax.
Poland will only invite investors to set up in the zones until the end of this year, but those companies that manage to get into the zones before the deadline passes will positively effect business in them for many years to come, Okland said.
He said that the zones see a lot of business travelers, which account for about 80% of Qubus' hotel clientele.
Earlier this year Qubus purchased the 250-room Cuprum Hotel in Legnica, a 150-room hotel in Glogow, and a 60-room hotel in Zlotoryja. All three cities are located near the Legnica special economic zone. So far, the zone has attracted Volkswagen, which built a $120 million diesel engine factory; Germany's Sitech, which spent $70 million on a car-seat manufacturing facility, and the U.S.-based Gates, which invested $5.5 million to produce automotive components.
The city of Walbrzych, where Qubus acquired the 160-room Skarbek Hotel, has its own special economic zone and to date has attracted 20 investors. One of them is Toyota, which set up a gearbox factory. Others include Petri, a producer of steering systems; Grossmann, which makes car interiors, and BTR, a cooling system manufacturer. Qubus' existing hotels in Zielona Gora and Gorzow are located close to the Kostrzyn-Slubice economic zone, Okland said.
Qubus, which plans to renovate all of the newly acquired hotels by the end of 2001, wouldn't reveal how much it paid for the properties or how much it is planning to spend upgrading them.
Okland said, however, that by acquiring existing hotels Qubus could develop hotels cheaper than by investing in greenfield operations. Qubus' new developments run $55,000-$60,000 per hotel room, he said, adding that such an investment would take four to five years before generating a return.
While the focus of Qubus' expansion has recently been on the special economic zones, the hotelier isn't ignoring other parts of the country, Okland said.
Qubus has acquired four additional sites in Warsaw, Krakow, Lodz and Opole, where it plans to set up greenfield operations, he said.
The project in Krakow, where Qubus plans to build a 195-room hotel in the Port Solny area, and Warsaw, where it's planning to build a 150 to 250-room hotel on ulica Wawelska, are set to break ground next spring, Okland said.
The timetables for the construction of the Opole hotel, to be located on an island on the Odra River, and the Lodz hotel, to be located on ulica Pilsudskiego, are still undecided, he said.
Qubus said that the "higher-quality budget" hotel business is poised for growth. "We are looking at the three-star market," he said.
At present, Poland has some 47,200 hotel rooms, according to figures from the London-based HVS, a hotel consulting firm.
By comparison, Okland said that Phoenix, Arizona has 45,000 hotel rooms while Orlando, Florida has 80,000.
Qubus said that hotel occupancy in Poland will soar once the country improves its roads and rail services as well as its image as a safe place to travel in. "This will happen," he said. "There will be lots of foreigners coming." Currently 50% of Qubus hotel clients are Polish 25% German, while the remainder represent other nationalities, he said.
Szczecin to get leisure center
Three internationals investors are joining forces to build a $61 million indoor entertainment center in the city of Szczecin, said a representative for one of the investors.
The project, to be located on the Miedwie Lake near Szczecin, will include a water park, hotel and entertainment section complete with a bowling alley and small shopping center, said Bert de Neve, general manager of Central European operations for Belgium-based Archipel.
The Szczecin project is to be located on a 37-hectare site owned by Germany's IDM Kortmann, a developer and one of the partners in the project, de Neve said.
IDM Kortmann and Archipel are also talking to an Israeli investor, said de Neve, who would not say how much each company would invest. "We are dealing the cards at the moment," he said.
Once investors agree on financing, construction of the project could start as early as next year and will be completed within 18 months, de Neve said.
The 65,000-square meter complex would be the first all-weather indoor entertainment center in Poland, he said.
The investors chose Szczecin due to its population (350,000) and proximity to Germany as well as the nearby Swinoujscie ferry port, which links Poland with Scandinavia.
