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The Warsaw Voice » Destination Warsaw » October 31, 2013
Destination Warsaw
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Warsaw Hotel Market is Fickle
October 31, 2013   
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Irek Węgłowski, vice-president of Orbis SA, a Polish hotel operator that is part of the worldwide Accor hotel group, talks to Jolanta Wolska.

Orbis is a publicly traded company that is listed on the Warsaw Stock Exchange. Where does Accor come into the picture?
Accor entered the picture in 2000 and since then increased its shareholding to more than 50 percent in 2008. Today, the Orbis Hotel Group has 60 hotels in Poland and two in Lithuania, offering more than 11,000 rooms for guests. Our hotels operate as part of the Accor brands, including Sofitel, Novotel, Mercure, ibis, ibis Styles and ibis budget.

Is Orbis involved in other types of business, in addition to running hotels?
We have restructured the group to fully focus on our core hotel business and we have let go of our travel agency and transport services, including car rental business and our vehicle fleet. We also decided to no longer be involved in the casino business. We had hotels that were not strategic or were unprofitable, and so we sold or closed several of them. However, we also continued to build new hotels, sometimes in the place of our old facilities. Over the past 12 months we have opened five new hotels, two in Warsaw, two in Cracow, and one in ŁódĽ. We will be modernizing our key hotels in Warsaw over this and next year. Our further business development will be based on acquiring new hotels through negotiating management and franchise agreements for both existing hotels and new developments.

How does this year compare with 2012 for your company, especially in Warsaw?
The hotel occupancy rate rose in the first half of 2013 by 4 percentage points, but the average room rate decreased in the same period. It is now slowly going up again. When the economy slows, as it has in the last couple of years, we feel that in the hotel business. Fewer conferences and training courses are organized, there is less travel and business activity in general. However, a look at the results allows us to look into the future with cautious optimism.

Great international events like the Euro 2012 soccer championships last year or Poland’s turn at the rotating presidency of the European Union in 2011 were really good for the hotel business. This November Warsaw will be hosting the high-profile COP 19 United Nations climate change conference. Although early bookings were not as forthcoming as estimated, we anticipate many late bookings to come and expect positive results. The experience in Poznań, where a previous COP conference was held five years ago, was very good.

What is the proportion of foreign guests to locals, and the business to tourist traveler ratio in your hotels in Poland?
Last year we had 47 percent foreigners and this year 43 percent, with the difference being due to Euro 2012. Overall, in the first half of this year 62 percent of our guests were business people. MICE [Meetings, Incentives, Conferences and Exhibitions] guests are important to us, because most of our hotels are in cities. Generally speaking though, we have about a 50/50 ratio of business guests to tourists in our hotels.

Are there too many five-star hotels in Warsaw?
There are neither too many nor too few. The Warsaw market is fickle. Hotels are full Monday to Thursday with MICE guests and then there are many vacancies at weekends. In Warsaw there are too many five-star hotels during weekends even though rates are reduced artificially.

We are hoping that the new Warsaw Tourism Organization (WOT) will actively promote tourism to Warsaw, not only for business, but for cultural events and leisure tourism. There is a lot happening in Warsaw and there is much potential to entice tourists for weekend stays. The Warsaw Destination Alliance has also been active in this field, so I am convinced that the efforts of both these organizations will produce good results.

Orbis was the first hotel group in Poland to sign a code of conduct aimed at protecting children against sexual abuse. Why?
We believe it is our duty as an organization promoting corporate social responsibility (CSR) to raise public awareness of the problem of sexual exploitation of children in tourism. Together with the Nobody’s Children Foundation we have developed a set of procedures and conducted training for our hotel staff. We have already had tangible results because, due to the training program, our staff were able to recognize some suspicious situations. These were reported to the police with several positive outcomes.

Our CSR strategy is also targeted at local communities. For example, last year, in cooperation with the Nobody’s Children Foundation and with financial support from Accor, we launched an annual training project to help underprivileged youngsters.
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