Hotel GM checks back in

The five-star hotel Crowne Plaza has seen major changes of late. The facade has been renovated and new restaurants opened, while the rooms are also being upgraded. But the biggest news is the return of Franz Rattenstetter to the helm. The German GM is relying on flexible prices and quality services to restore the hotel to its pre-crisis level. By Roxana Cristea

November 2011 - From the Print Edition

I do not think we can talk about problems in the Romanian hotel market, but rather of more competitiveness, which is why we have to make greater efforts to provide quality services and attract customers,” Franz Rattenstetter, general manager of Crowne Plaza, tells The Diplomat – Bucharest of the local hotel scene.
According to the German manager, who took up the reins of Crowne Plaza in Bucharest for the second time early this year, after having previously headed the unit between 2001 and 2007, the market is more competitive than in 2007 or 2008 because more properties have been opened. In 2009 alone, more than 1,000 hotel beds were added to the existing capacity, by Ramada Plaza, Radisson and smaller players like Moxa.
“These hotels were not here when I left in 2007. But when I came back in February this year I got the feeling that there are signs the business is moving and recovering slowly, although not seeing the growth we had in 2006 and 2007. I don’t think we’ll see this kind of environment in general, not only on the hotel industry but across all other industries,” predicts Rattenstetter.
It seems that, after two years of decreasing results in the hotel market, there are some signs that the market is slowly recovering, as people begin to travel more, companies start to organize trainings and organize company meetings and conferences and the demand for accommodation in on the rise.

Strategy switch

Four years ago, when the GM decided to return back to Germany, the Romanian hotel market was booming. His return to the Crowne Plaza has come at a difficult time because of the problems caused by the financial crisis – fewer customers less money spend by companies in almost all segments put pressure on the market to reduce prices. So, any return to the figures of 2007 – when revenues reached EUR 11 million – is some way off.
“Nobody expects to make things work overnight,” says Rattenstetter. He adds that hotel’s revenues will not reach pre-crisis levels in the near future. For this year, the GM is targeting an income hike of 20 percent. Results in 2010 were below those of 2009, when Crowne Plaza registered revenues of EUR 6.2 million.
To achieve his aim, the Crowne Plaza manager has changed strategy: the hotel is now more flexible in its pricing and has improved the quality of services “I don’t feel the crisis and I am positive because the most difficult years were 2009 and 2010. It’s a stagnant market so everybody is trying to get the business,” adds Rattenstetter.

Aiming for the Crowne

“Last year we had a period of renovation, in which we invested EUR 4 million. This was an important investment for our hotel and had a positive impact. In 2011 we have completely upgraded our biggest suite and we want to upgrade, step by step, all the suites (eight of which will be finished this winter). The pool, fitness center and spa will follow in spring 2012,” says Rattenstetter. The German is aiming to increase the hotel’s bottom line, aided by an exclusive restaurant which, following renovation, will have a capacity of 30 seats and a la carte menu, as well as a fish and seafood restaurant “La Veranda”.
In terms of his career, the Crowne Plaza general manager says he will stay in Romania for a couple of years, but that any extension to that depends on how things go. “In two, three years I will decide what to do – whether I’ll continue in the Hotel business or retire,” says the hotelier.

Seeing the light

“One of our strengths is our green environment. All the conference rooms have natural light; you open the door and can go out into the garden. Our strategy is to promote our values, our benefits – our facilities are different from any city hotel,” says the manager, adding that he is targeting in particular the north of town where there are plenty of office buildings, like Bucharest Business Park and others.
Another advantage is, according to the GM, that the hotel is closer to the two airports than its central rivals. The property caters mainly to businesspeople, the corporate market and also the convention market, as it has 14 meeting rooms with a capacity up to 400 persons.

Price pressure

Currently, Crowne Plaza has a hotel room price battle on it hands, according to the boss. “We still have this during certain periods especially over the weekend, when everybody is trying to boost business. We do quite well during the week, but at the end of the week there are plenty of vacant rooms. The number of tourists visiting Romania has not increased in recent years. Average rates are now up to 30 percent lower than in 2008,” says Rattenstetter.
The entire European hotel market has suffered because of a decrease in tourist numbers. However, countries like Hungary, the Czech Republic and Germany have recovered quickly and are working their way back to the revenues they had before the financial crisis. Romania lags far behind and the recovery will be slower.
Rattenstetter estimates a 10 percent increase in the hotel’s occupancy rate this year, compared with 2010. “It’s hard to raise rates given that VAT is up more than 5 percent on Food & Beverages prices. Moreover, food is not cheap in this context, oil prices are increasing and people need to absorb these economic shocks, despite having more or less the same salaries,” says the Crowne Plaza GM.

Who is Franz Rattenstetter?

Franz Rattenstetter began his career at Intercontinental Hotels Group in 1989, as director of sales and marketing at the Intercontinental Hotel in Frankfurt, before moving to the Middle East as the resident manager of the Intercontinental Amman, Jordan, and the Al Bustan Palace Intercontinental Hotel in Muscat, Oman. He was the opening GM of the Mzaar Intercontinental Resort in Lebanon and spent in total over nine years in the Middle East. He has also worked in England, Italy and Switzerland. Rattenstetter was reappointed general manager of the Crowne Plaza Bucharest this year. He previously held the position between 2001 and 2007. Prior to his return to Bucharest, the hotelier managed the Movenpick Resort in Petra, Jordan. Rattenstetter graduated from Hotel Management School in Tegernsee, Germany, and Leysin, Switzerland.