Marriott Bucharest generates highest revenues after Moscow and Paris

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International hotel chain Marriott, which operates the five-star JW Marriott Bucharest Grand Hotel in Romania, aims to have five hotels branded as Marriott, Renaissance and Courtyard.
“In five years I believe we will have five hotels on the domestic market. The market has grown very much over the last two years; it would have been a perfect time to enter back then, but now investors are more willing to invest,” said Kurt Strohmayer, general manager of Marriott Romania.
 
He added that Marriott was still in talks with developers to bring the Courtyard and Renaissance brands to Bucharest. The chain also plans to open a Marriott hotel in Cluj, a Marriott or a Renaissance hotel in Timisoara and a Courtyard or Renaissance hotel in Brasov. The Marriott and Renaissance hotels will have about 250 rooms, while the Courtyard will have 150 to 200 rooms.
The Marriott chain is currently in talks with developers and is set to sign at least one contract by the end of the year.
 
“These hotels will operate under management contracts. We have very few franchises – in Italy and Moscow, and usually grant franchises only to companies we know very well,” said Strohmayer, who stated that they were only interested in greenfield investments, as already existing properties are very hard to bring up to the required standards.
The Marriott Hotel in Bucharest is one of the most profitable in Europe, and is also situated among the top revenue-generating countries.
 
“The highest revenues come from the Marriott hotels in Moscow, followed by Paris and Bucharest, while the highest profits come from Russia, Czech Republic and Romania,” said Strohmayer. He added the Marriott Hotel in Bucharest had a record year in 2007 in terms of revenues and profit margin.
Societatea Companiilor Hoteliere Grand (SCHG), which owns Marriott Hotel in Bucharest reported 40 million euros in turnover, an increase of 8% against the previous year and over 11 million-euro losses in its filings with the Finance Ministry. However, SCHG officials would not comment on the cause of these losses.
 
 “We had the highest revenues and the highest profit margin and the positive trend will continue in 2008, as well,” Strohmayer said, and added that the increase in energy, utilities and staff costs will affect the profit margin in the future, although growth was expected this year.
SCHG controls the accommodation facilities, conference rooms and restaurants inside Marriott, as well as the shopping galleries, where, as of this year, the luxury brand Louis Vuitton has been present.
“The shopping gallery inside the Marriott is seen as a sort of luxury mall. We will continue to bring luxury brands such as Gucci and Patek Philippe,” declared Strohmayer.
 
Another player that has recently entered the five-star market in Bucharest, where Hilton, Howard Johnson, Crowne Plaza and Intercontinental are also present, is Radisson SAS.
“There is still room on the market for everybody. The growth is tightly related to the economic trend and if the economy maintains this positive trend, our business will also grow,” explained Strohmayer.
The five-star market continues to rely on business travel, which generates over 80% of revenues of hotels on the market. In Marriott’s case, the leisure segment stands at 4 to 10% of the total.
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