Suburban hotels betting on conference centers, leafy locations to compete

Andrzej Bartkowski, the president of Mazurkas Travel, sees suburban hotels with conference facilities as the only way of escaping the escalating battle for business travelers in Warsaw's city center. That's why two years ago his company poured €7 million into the 130-room Best Western Hotel Mazurkas (BWHM), located in the industrial landscape of Warsaw's Poznań exit road about 14 kilometers from downtown. "Hotels of this type are often located on exit roads outside big cities and are a proven formula," Bartkowski said. "This was the aim of our hotel - to head for the conference market." About 90% of BWHM's clients are companies that organize training seminars, meetings and conferences, he said. Hotel development is reaching an all-time peak in Warsaw with the opening of the Radisson SAS this month and new offerings from Intercontinental, Westin, Gromada and Ibis set to bring competition to a high point in the next two years. To avert disaster, hoteliers need to look for niches fast, according to Marek Dąbrowski, the head of the hotel department at the Warsaw office of Colliers International, a real estate agency. "At this moment the market for hotel properties everywhere is pretty bad, and especially in (city) centers where you have a significant oversupply coming on stream," Dąbrowski said. "If anybody says they are doing well on this market, then I don't think they're being truthful." Business in the Warsaw area would be especially tight in 2003 and 2004 due to the hotel glut, he added.

Riding it out And while some of the new out-of-town hotels are experiencing a financial crunch while they try to pay off building loans, they won't likely reap significant profits for another two or three years. Though the BWHM was completed only a year ago, for example, it will gain only modest profits by the end of the year, despite the popularity of its 900-square-meter conference center, Bartkowski said. "At the moment, things could be better, but we are making our loan repayments," he said. "A hotel needs about three years to get into full swing, (but) we have been open for only a year." Bartkowski declined to give BWHM's profit projection, but said the hotel would make up for its summer losses in autumn when the conference business is expected to pick up. Confident about the hotel's future conference business, its owners are considering building an extension with a 1,000-seat meeting facility, he added. Jarosław Straś, the manager of the Boss Hotel in Miedzeszyn near Warsaw, is optimistic that even more conference traffic will saturate hotels in sedate, leafier locations. "We have observed increasing interest from conference clients in out-of-the-way locations," Straś said. "People want to relax in calm surroundings when they've been working." To respond to a growing demand for rooms and meeting facilities, the Boss added about 200 beds and increased its number of conference rooms to 13 last June. It also built a two-lane bowling alley that will open in October. "In the past we found we couldn't cope with the traffic," Straś said of the hotel, which is enclosed by a forest and has a replica of a Polish highlanders' pub. "We had to send people to other nearby hotels."