The cost of luxury
Back in 1989 when the Marriott came to Warsaw, the market was good, says Gus Ismail, the hotel's resident manager.
It's not so good today, at least not good enough, other hoteliers say.
Research by the Warsaw Business Journal shows that out of a total of 19 hotels in Warsaw, eight have four-or five-star ratings. Forte's Bristol reported the highest overnight rate of $300 double, followed by the Marriott, which charges $205 a night for a double, according to the WBJ survey.
Hotels provide a range of standard services including business centers, conference and banquet facilities, pools, saunas and fitness centers.
The Boston-based Sheraton plans to enter the market with a five-star, $50 million Warsaw hotel, due to open in May 1996 on Plac Trzech Krzyzy.
Yannick Rouvrais, general director of Hotel Mercure, takes a dim view of Sheraton's arrival.
Hotels in Warsaw need at least 60% occupancy to do well and 70% occupancy would indicate enough demand to support additional construction, he says.
But "no hotel in Warsaw is reaching this," he says.
Last year Warsaw's hotel occupancy figures rose to 58%, up 8% from the previous year, according to research by Claas Elze of Hospitality Valuation Services International.
Most luxury hotels here reported occupancy rates higher than the average reported by the London-based research group.
The Mercure said 1994 occupancy ran 66%. Victoria-Intercontinental estimated occupancy at 70% last year, the Marriott in the high 60s, the Forum at about 62% and the Holiday Inn around 60%. The Bristol said last year's rate was a bit less, but not far off from this year's projected 60%.
The Sheraton "is going to hurt everyone," Rouvrais says. "We haven't reached price wars ... you could say that it's starting to happen. Some hotels are involved in a kind of dumping."
He defines dumping as cutting prices lower than the competition.
Michael Goerdt, the Bristol's general manager, says the price cutting could happen but doesn't think price wars will break out.
The market is getting better but it's not so good, he said.
"It's not like a rocket, of course, but demand is growing slowly," Goerdt says.
Ismail of the Marriott says the market is still very good and isn't worried about the Sheraton.
"I don't view it (the Sheraton) as the start of price wars," he says. About the market, he adds: "It's more challenging, we have more competition which is healthy."
To compete, hotels are marketing image, quality and benefits. At the Forum, guests receive frequent-flyer points in addition to fruit baskets in rooms and express check-in and check-out service. The Marriott also boasts of its service.
The Victoria is planning refurbishment to remain competitive on the market, says Iwona Bartuszek, Victoria's sales manager.
The Bristol stresses quality and intimate elegance. The smaller, turn-of-the-century hotel is totally different from the other high-rise hotels downtown. It was built in 1901, destroyed in World War I, then rebuilt and survived the bombing of the Second World War. It fell into disrepair and underwent years of reconstruction in the 1980s. The construction company of Hoffman and Maculan renovated the hotel in 1989, then Forte moved in three years later with the grand opening.
The future of the hotel market is "difficult to forecast," Goerdt says. "In 1993 (occupancy) was less than in 1994, and in 1995 we are hoping there will be more."
It's not so good today, at least not good enough, other hoteliers say.
Research by the Warsaw Business Journal shows that out of a total of 19 hotels in Warsaw, eight have four-or five-star ratings. Forte's Bristol reported the highest overnight rate of $300 double, followed by the Marriott, which charges $205 a night for a double, according to the WBJ survey.
Hotels provide a range of standard services including business centers, conference and banquet facilities, pools, saunas and fitness centers.
The Boston-based Sheraton plans to enter the market with a five-star, $50 million Warsaw hotel, due to open in May 1996 on Plac Trzech Krzyzy.
Yannick Rouvrais, general director of Hotel Mercure, takes a dim view of Sheraton's arrival.
Hotels in Warsaw need at least 60% occupancy to do well and 70% occupancy would indicate enough demand to support additional construction, he says.
But "no hotel in Warsaw is reaching this," he says.
Last year Warsaw's hotel occupancy figures rose to 58%, up 8% from the previous year, according to research by Claas Elze of Hospitality Valuation Services International.
Most luxury hotels here reported occupancy rates higher than the average reported by the London-based research group.
The Mercure said 1994 occupancy ran 66%. Victoria-Intercontinental estimated occupancy at 70% last year, the Marriott in the high 60s, the Forum at about 62% and the Holiday Inn around 60%. The Bristol said last year's rate was a bit less, but not far off from this year's projected 60%.
The Sheraton "is going to hurt everyone," Rouvrais says. "We haven't reached price wars ... you could say that it's starting to happen. Some hotels are involved in a kind of dumping."
He defines dumping as cutting prices lower than the competition.
Michael Goerdt, the Bristol's general manager, says the price cutting could happen but doesn't think price wars will break out.
The market is getting better but it's not so good, he said.
"It's not like a rocket, of course, but demand is growing slowly," Goerdt says.
Ismail of the Marriott says the market is still very good and isn't worried about the Sheraton.
"I don't view it (the Sheraton) as the start of price wars," he says. About the market, he adds: "It's more challenging, we have more competition which is healthy."
To compete, hotels are marketing image, quality and benefits. At the Forum, guests receive frequent-flyer points in addition to fruit baskets in rooms and express check-in and check-out service. The Marriott also boasts of its service.
The Victoria is planning refurbishment to remain competitive on the market, says Iwona Bartuszek, Victoria's sales manager.
The Bristol stresses quality and intimate elegance. The smaller, turn-of-the-century hotel is totally different from the other high-rise hotels downtown. It was built in 1901, destroyed in World War I, then rebuilt and survived the bombing of the Second World War. It fell into disrepair and underwent years of reconstruction in the 1980s. The construction company of Hoffman and Maculan renovated the hotel in 1989, then Forte moved in three years later with the grand opening.
The future of the hotel market is "difficult to forecast," Goerdt says. "In 1993 (occupancy) was less than in 1994, and in 1995 we are hoping there will be more."
