Downturn good for expansion

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1 Summertime You must have noticed that our updates of late have been scant, which, in part, pertains to the simple fact that these are lazy days, albeit not for us. Au contraire, we re busy building new websites and enhancing HSMAI s European presence in the social media. First off, HSMAI Chapther Norway, whose website is currently under construction, to reappear as an HSMAI.eu clone with national chapter colours and features, shares secretarial functions with HSMAI Europe. Amid preparations prior to the autumn s big events, the organisation is busy building online relations and networks, with groups on Facebook and LinkedIn, in addition to our Twitter, Flickr and YouTube profiles. We will however try to publish news as they occur. Please notify our editorial staff if you know of any noteworthy news: newsdesk@hsmai-europe.com

2 Whilst these time-consuming enterprises take place, we hope you forgive that our website has entered a summer mode, and wish you all a fabulous summer. httpv:// Downturn good for expansion The Polish hospitality magazine Hotel Profit just announced its plans of expansion. From September 2009 it will be available also in English, and published in the entire CEE region. For the last four years this hospitality B2B monthly was focused only on the Polish market, which is reasonably big, in an Eastern Europe scale, but the aim was to create media addressing issues of importance for the entire region, according to a press release issued by the company today. One good example is VAT value, which is now lower than EU stipulated by regulation, and has to be increased during the next few months, which would certainly not help hoteliers in these difficult times. The best example is Lithuania, where the Government increased VAT from five percent to 19, causing serious problems for the domestic hospitality industry. Poland is currently on the same track, and although the Ministry of Treasury declared there will be no change in VAT this year, there is widespread fear for 2010, as the change would be rather big, from current seven percent to 22. Thanks to its partnership with renowned institutions, such as the Cornell Center for Hospitality Research, Hospitality

3 Financial & Technology Professionals, STR Global or International Spa Association, Hotel Profit is able to offer the highest class know-how, resources and professionalism. Starting with September issue, Hotel Profit CEE will be distributed on-line to about 1500 professionals from Central Eastern Europe. After reaching a reasonable amount of subscribers, a printed, paid version of the magazine will be made available, too. The first idea about new opportunity came during last year s International Hotel Conference in Rome, recollects Daniel Lukaszewicz, Managing Director and co-founder of Concept Media, the publisher of Hotel Profit CEE. We were talking to hospitality professionals and a lot of them were asking about the publication, which would cover hotel management related issues in the area, he says in today s press release. Initially Hotel Profit CEE will be available in a digital flip-version, free of charge. We decided to go for an on-line publication, as it is more effective, easier to use and quickly delivered, explains Dagmara Ziemiaszewska, Hotel Profit CEE s editor-in-chief. We hope to gain a reasonable amount of subscribers within a few months before preparing a printed version, she adds. What we already know for sure, is that part of the October edition will be printed, as Hotel Profit CEE will attend the International Hotel Conference in Venice, which the magazine is sponsoring. Magazine representatives will also take part in one of the discussion panels, focused on investment opportunities in the region s hospitality business. Concept Media, the Hotel Profit CEE publisher, also organises conferences and seminars addressing the Polish hospitality industry, but also considers organising an investment conference: Hospitality in Central Eastern Europe, which would be logical continuation of the company s magazine expansion in

4 new markets. Thon Hotels + First Hotels = True OSLO, Norway Thon Hotels and First Hotels sign cooperation agreement for Scandinavia. The agreement includes cooperation in the areas of sales, distribution and marketing. The aim is to increase the total availability for both chains in the Scandinavian and Benelux hotel market. According to a press release issued today, the cooperation will start 1 January The two chains will offer over 104 hotels throughout Scandinavia and Benelux. The two chains are major players on the Scandinavian hotel

5 scene and have their strength in different geographical areas. They have strong brands, extensive coverage, large sales organizations and quality hotel products. First Hotels has 46 hotels in Scandinavia, of which 31 hotels are in Sweden, nine in Norway and six in Denmark. The annual turnover for First Hotels is NOK 1.2 billion. Thon Hotels is the third largest hotel chain in Norway, with 53 hotels and two more planned for the autumn Annual turnover is at NOK 2.4 billion. Thon Hotels also has a number of hotels in the Benelux region, also to be included in the cooperation. The cooperation will primarily focus on sales, distribution and marketing. This will benefit the customers in terms of a larger range of hotel products in a significantly larger geographical area. There are also plans for cooperation between the two chains loyalty programmes, thereby enabling the guests to earn and spend bonus points in both chains. Both Thon Hotels and First Hotels will maintain full ownership and control over their brands under the agreement. Photo: Mr. Morten Thorvaldsen, CEO, Thon Hotels. Scandic buys Oslo hotel

6 Scandic continues to grow, now adding another hotel in Oslo. Today an agreement was signed between Fornebu Hotell AS and Scandic, confirming that the new hotel in the Fornebu business park will be a Scandic. The hotel has a fantastic outlook, both across the Oslo Fjord and to the future, with its location in this fast-expanding part of Oslo. With our own expansion in Norway continuing over the next few years, signing this long-term agreement for Scandic Fornebu means adding another hotel with excellent prospects and a strategic location to our growing inventory, comments Frank Fiskers, President & CEO of Scandic in a press release today. Scandic Fornebu, Oslo.

7 Photo: Scandic Hotels Fornebu business park will be home to the head offices of some of the largest companies in Norway with a total of almost 10,000 office workers. Fornebu Hotell AS is owned by IT Fornebu Eiendom and Utstillingsplassen Eiendom, a Hamar-based property company. The Narud Stokke Wiig firm of architects will design the spectacular hotel, which will have a floorspace of 17,000 m², 300 rooms, a restaurant and bar, a spa and gym and top-notch conference facilities for up to 1000 people. It is located on the shore of Rolfsbukta bay, with views across the Oslo Fjord, putting it only ten minutes away from central Oslo, with excellent communications. As chairman of Fornebu Hotell AS, I m proud and pleased that we have secured a leading hotel operator like Scandic to run the hotel, which will be the most important of Fornebu s portfolio of major real estate. As chairman of IT Fornebu, I m also happy that we will now be adding the last building along the seafront, completing this part of the commercial development of the Fornebu peninsula, explains Erik Løfsnes. The construction of Scandic Fornebu will start in mid-2010, with the hotel due to open in spring Top photo: Frank Fiskers, President & Chief Executive Officer, Scandic Hotels. Photographer: bsmart Finding the Tailwinds to Lift a Global Industry Title: Finding the Tailwinds to Lift a Global Industry

8 Location: Hilton Prague Hotel Link out: Click here Description: The 2009 ACTE Global Education Conference in Prague. Start Date: End Date: Dismal German forecast Forecasts from the May 2009 Hotel Market Forecast report from STR Global, the leading provider of market information to the world s hotel industry, indicate that average daily rate declines during the next 24 months across Germany s major cities will be the main cause of the industry s sluggish performance. Just as positive recent data from Germany s Ifo business climate index on the prospects for the German economy is tempered with on-going fears of further job losses, limited improvements in hotel occupancy during the next two years are offset by the rate declines. See the chart below. Even in those cities such as Hamburg and Munich where there are expectations of modest increases in occupancy of up to two percent and three percent in 2010, respectively, the forecasted decreases in room rate are six to seven percent. Given the fast changing economic climate, the Hotel Market Forecast from STR Global is updated each month. It is vital to look regularly at how the local economic conditions are affecting our industry, said James Chappell, managing director of STR Global in a press release. The Hotel Market Forecast gives subscribers essential, regular visibility on what is likely to happen, which is increasingly

9 relevant in these turbulent times. Hotel Market Forecast Report May 2009 (selected German cities) Occupancy (% change) Minimum Maximum Minimum Maximum Berlin Cologne Dusseldorf Frankfurt Hamburg -3-5 o 2 Munich Stuttgart Average Room Rate (% change) Minimum Maximum Minimum Maximum Berlin Cologne Dusseldorf Frankfurt Hamburg Munich Stuttgart Source: STR Global, May 2009 Hotel Market Forecast The Hotel Market Forecast product was launched earlier this year and the seven German markets detailed above are part of the 42 markets and sub-markets across Europe covered by the reports. The forecasts are based upon the most recent available economic data and STR Global s historic market data

10 from previous business cycles. The advanced model is run in conjunction with e-forecasting.com, an international economic research and consulting firm, and considers about 300 economic indicators, including gross domestic product, the price of oil, exchange rates, consumer confidence and business sentiment. It also takes into account local drivers of a particular market. We have been looking at these models for several years now and with each market having a unique model to predict future performance that includes the impact of destination brand and major local events, the reports enable subscribers to keep an eye on specific upcoming conditions, explained Chappell. The Hotel Market Forecast reports are made more useful by two additional features. Firstly the reports will show how close the forecast was to what actually happened, so that trends can be better understood and charted. And secondly, 18 months of historical hotel performance data allows the forecast to be set in context. Scandic Julia renovation

11 Scandic Julia will undergo a full-scale renovation and extension, during which the hotel will be closed for 18 months starting from 1 December The result will be a hotel catering for the modern lifestyle and the conscious guest seeking smart solutions. Following the renovation, a modern hotel will open in central Turku during the spring of According to a press release the new Scandic Julia will feature 155 inspiring and airconditioned rooms, state-of-the-art conference facilities, and a restaurant. The hotel guests will also have a Scandic gym, two saunas and a garage at their disposal. It is important that we strengthen our position in Turku, one of Finland s top three hotel destinations, to enhance Scandic s market position and brand in Finland. I m certain that the renovation of Scandic Julia, turning it into a smart and modern hotel, is one thing that will do just that, says Frank Fiskers, President and CEO of Scandic in the press release. Operated at Eerikinkatu 4 by Scandic, the property is mainly

12 owned by Ilmarinen Mutual Pension Insurance Company. The main contractor in the renovation project is Palmberg Turku Oy, while Haroma & Partners Oy from Turku is the main architect. The hotel s interior will follow Scandic s design and environmental concepts. The value of the investment is approximately EUR 14 million. It is very positive that we are able to bring Scandic Julia s standards to the present-day level by expanding the hotel with 37 rooms and by updating the hotel s technology and service options. The renewed Scandic Julia will make an excellent addition to our offerings in Turku, where we already operate Scandic Plaza with 117 rooms, opened in 2000, says Aarne Hallama, Vice President of Scandic Finland. During the renovation, Scandics guests in Turku will be served by Scandic Plaza. Photo: Frank Fiskers, President & Chief Executive Officer, Scandic Hotels. Photographer: bsmart