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Anda Todor, AmCham Romania
More attention needs to be paid to the qualitative approach, rather than quantitative»
  Features:      COUNTRY FOCUS   |   SECTOR ANALYSIS   |

Always room for improvement

JW Marriott Bucharest had a good year in Romania in 2010, believes Igael Porecki – the Israeli who has been at the helm of the internationally-known hotel since 2009 – and the outlook for 2011 seems encouraging

June 2011 - From the Print Edition

“This year is going to be much better than 2010. We are more optimistic and we have more requests and more demand,” says Porecki. “The first four-five months are going according to our plan and budget, by a fair 10 percent over last year.”
But this is a rare success story, as the local hotel market, just like the rest of Romania’s economy, has seen its share of hard times in the last two years. “The entire travel industry has suffered a lot – not only hotels, but also airlines – and everybody reduced their rates in 2010.” The cost of a room at the JW Marriott, for example, is about 20 percent down compared to its 2008 level.
“In 2011 we’ll see an increase in demand for Bucharest, but we won’t see an increase in the rates,” says Porecki. “The market is not yet ready to pay more for the same products.”

Capitalising on the crisis

But the decline in occupancy rates during the crisis, although it affected hotel revenues, has had some positive effects as well. JW Marriott used this less hectic period to carry out renovation works and line up a fresh look and better services ready for market recovery. The number of Vienna Lounge couches has been increased to 106 and classic Romanian cakes – Carpati and Savarina – were added to the menu. The equipment in the largest conference room was also updated with seven independent video projectors and screens embedded in the walls, a state-of-the-art centralised audio system, IPod-controlled 50 intelligent lights with infrared commands, new wallpaper and carpeting.
Investments will continue this year as well. The JW Steakhouse restaurant – a concept which is present in several Marriott properties around the world – was opened recently after a 1.5 million Euro investment. “This winter we are planning to redo the Constanta Ballroom and next year we hope to renovate the rooms,” says Porecki. “Renovating Constanta Ballroom will require an investment of about 700,000 Euro.”
The JW Marriott GM gives the main reason for the investments as the need to offer customers better supplementary services, which could persuade them to return to the hotel, instead of cutting rates further, which would dent the profitability of the business.

Courtyard courts expansion

But expansion is still on the cards. In the future the Marriott chain will increase its presence in Romania with a Courtyard hotel. The property will include 198 rooms and Porecki says it is now in the construction approval stage. “I know that there are negotiations with some investors. It’s not only Courtyard that we want to develop, but the Renaissance brand also, which is very similar to the Marriott,” Porecki adds. “This is a process. We went through a crisis, banks were not so willing to give money to investors, and maybe this will change next year.”
The manager goes on to talk about the chain’s expansion possibilities in other cities in Romania, with the Courtyard concept “a better suited brand to the local market, mostly oriented towards business travel. Marriott as a company is looking to have hotels in Sibiu, Timisoara and maybe in Arad. Five-star facilities only in the main cities, like Bucharest, while in the secondary cities we are looking at four-star hotels.”
A good hotel needs a good location. That’s why Marriott, which manages over 3,600 hotels worldwide, is very careful when it chooses where to site its units. “We do not want to add new hotels to the network if the location is not perfect, and the land plot isn’t big enough,” says Porecki.

International events are key

In 2011, the GM’s role is to predict how client preferences will change as the economy tentatively recovers. It is clear that in times of crisis guests who choose to stay at a five-star hotel have high standards and high expectations.
“The business is very challenging. Clients are getting more and more demanding and they know exactly what they want. You can’t fool the guests,” he says. “Years ago, clients were not so demanding, but now they are exposed to a lot of five-star hotels and competition. Go to all the websites that people are writing on today. If you want to go somewhere, you go online and you look for a recommendation. The world has become transparent.”
What’s more, the hotelier must stay focused to meet both the budgetary constraints and the owners’ expectations – as they still have obligations to the bank. “I call it surviving, even in good times. Also, everybody has to be happy – employees, owners and the Marriott,” adds the general manager.
On the other hand, Porecki knows very well what advantages the hotel he manages has. “JW Marriott is a very strong brand. Also, the size of the hotel is a big bonus for us. As you can see, on one side we have people having lunch, on the other side we have an exhibition; we also have meeting rooms. And we have the best parking facilities in Bucharest accommodating 500 to 600 cars, which is very convenient for big events.”
In fact, an increase in the number of events would help the hotel industry to recover. “We have many five-star hotels, very nice, modern hotels that not many cities have, and we are still very attractive to Europeans,” says Porecki.
“A few weeks ago we hosted a big conference for a large European company with about 350 participants. The reason they chose Bucharest was its facilities: we have a lot of five-star facilities, and the same conference is much cheaper here than in London, Paris or Frankfurt. This is a big advantage now for Bucharest and I hope that more international organisers see Bucharest as a destination.”
As an example JW Marriott Bucharest’s manager recalls the 2008 NATO summit, when many of the foreign delegates stayed at his hotel. “Although I wasn’t managing the hotel at that time, I know that US President George W Bush stayed here.”

Risky business prospers in Europe

Although the crisis has had a huge impact worldwide, the Marriott brand is enjoying good results across Europe. “For Marriott in general, there are cities, especially in Germany and also in France, where the hotels are now where they were in 2008.”
But one has to keep in mind that the hotel industry is risky, and depends on many variables. “For example, a few months ago we opened a beautiful Renaissance hotel in Tripoli, Lybia. That hotel is now closed because of the conflict. It’s the same in Egypt, we have seven-eight hotels in Egypt and everything has fallen because of the political crisis,” says Igael Porecki. “It’s a risky business which depends on wars, natural disasters and economic crises.”

Who is Igael Porecki?
- July 2009-present
GM at JW Marriott Bucharest Grand Hotel
- September 2002-June 2009
GM at two Marriott Hotels in Georgia: Tbilisi Marriott Hotel and Courtyard by Tbilisi Marriott
- 2004-June 2009
Resident manager of the Marriott Warsaw Hotel
- May-September 2002
GM at the Renaissance Tel-Aviv Hotel

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