Photo: Rade Kovač www.radekovac.com
Economic crisis has discouraged a lot of world known companies to invest in Serbia, but PSP FARMAN wasn’t among them. After residential-business complex WEST65, next project will be Courtyard by Marriott Belgrade City Center Hotel.
PSP FARMAN has certainly been very brave to go in mentioned investments in this hard time of economic crisis which has affected almost whole world and our region especially. This courage is characteristic of successful corporations and it is based on well-planned business. The fact that some of the world’s biggest commercial banks in region support us in these projects confirms this. You can be sure that we wouldn’t get any support from traditionally careful and conservative banks if there weren’t well planned projects.
Belgrade has missed for a long time a hotel which is built, equipped and led by the standards of the world’s major hotel operators, especially in the old town and its center on the right bank of the river. Marriott has recognized exceptional potential of our object’s location, downtown, at Republic Square, next to National theatre and National museum. Better location for the entry on a new market, like for the Marriott is Serbian, can’t be even imagined.
We have spoken with all major hotel operators in the world before we decided about our hotel’s operator. Marriott was chosen because of few reasons: brand recognition, strong marketing support and support of extraordinary developed and efficient reservation system, which will significantly shorten the period of our hotel’s market introduction. This initial period is always the most critical for new hotels. I shouldn’t forget exceptional cooperation and efficiency of Marriott’s regional representative, Mr. Ivica Cacic, which is now promoted to vice president for EMEA region.
Relationship with Marriott is defined by hotel management contract. When we finish the object’s reconstruction in accordance with technical standards of the brand „Courtyard by Marriott“, we will give it away to Marriott to manage it. Marriott is taking care about all aspects of work, from personnel selection and their training to everyday hotel management. They get their commission fee from business results. PFB Properties is hotel owner, and it is taking care about its capital maintenance. Hotel management contract has initial validity period of 30 years.
At the end of 2010, when I came in PSP Farman group, its president Mr. Branislav Grujic gave me complete freedom to choose hotel operators and to negotiate with them. We made business plan with a team of young and ambitious experts during November and December of 2010. and provided credit support from Eurobank based on it. By the end of March of 2011. I negotiated with all major hotel operators: Hyatt, Accor, Hilton, Marriott, and at the end of month we chose Marriott. Contract adjustment process with this kind of organization is long and hard, partly because of matter complexity, conditioned by job itself and long-term nature (hotel management contracts with major hotel operators are signed for a period not less than 20 years) and partly because of administration of these organizations which are established to work globally. We signed set of 6 contracts with Marriott on 5th of December 2011. During the negotiations and after the contracts were signed, I have coordinated activities on the preparation of project documentation, the development of interior project (for interior designers we chose a prominent German company with an extensive experience in working with Marriott Peter Silling and Associates) and on solving administrative and organizational maters. The preparation of project documentation in our project office is almost done. We are expecting building license these days so we could start reconstruction. We have founded an experimental room, equipped it completely and confirmed it with Marriott. We have formed a team of engineers to manage reconstruction works. Tender and selection of contractors are in progress.
It is the building at the corner of the streets of Vasa Carapic and Dositejeva, former Jugodrvo’s office building.
Reconstruction will start on April 1st, and the hotel will be opened a year after.
Marriott is taking hotel management according to signed contracts. Personnel selection and their training will start six months before opening. In this kind of arrangements operator, in our case Marriot, appoints general director of the hotel. In addition to him, Marriott also appoints financial director. General Director then gathers his team. If there is appropriate qualified manpower at the local market, it will be employed. This hotel type, besides general and financial directors has 5 to 6 managers which manage certain sectors. I hope so that all these positions will be taken by our experienced people.
Global economic crisis from 2008. has certainly marked hospitality sector. Basic tendencies are oriented towards reduction of operating costs and efforts to keep profitability. In that period revenues were reduced. City hotels with 4 stars, primarily oriented to business guests, redesigned their technical standards in order to reduce operating costs. At the same time, guests’ comfort mustn’t be disturbed. For example, typical room size was reduced from 25 m2 to 22 m2. However, the guest will not notice that difference visually and functionally because the furniture is redesigned, bathroom is separated from room with a glass barrier, business guest has great worktable that can be moved across the room, comfortable armchair offers him complete office comfort, TV has 42” screen. A guest has available mini fridge in room, but it’s not a classic mini bar. Next to the hotel reception there is a small convenient shop where guest can buy 24 hours a day what he needs, take it to his room and keep it in a fridge. This is the example of costs reduction for mini bars’ servicing that has always been very problematic for hoteliers where the guest still has all the comfort and possibility to choose and adjust mini bar’s content according to his own needs.
Chief designer, Mr. Miomir Luzajic, has been already known by the brave and effective architectonic designs. His project is former department store „Srbijateks“ at Terazije street, between old „Protokol“ building and the building block leaned on „Moskva“ hotel. This will be another futuristic facade project. Many metropolises in the world have facades with this concept, but in our facility there is an additional design’s functionality provided – it ensures privacy for guests in rooms oriented to Vasa Carapic street, and the facade partly solves very serious problem of possible object’s overheating since it is south-west oriented and there are big glass surfaces. This provides energy saving as well.
Aesthetic standards aren’t related to size, but to hotel category or brand. In agreement with Marriott and interior designers, aesthetic standards applied in our hotel will be significantly improved comparing to brand’s „Courtyard by Marriott“ standards. This refers to public spaces especially: reception, lobby, restaurant, cafe bar, club, conference room. The agreement is based on the fact that city center location like this, in historical city core, next to National theatre and National museum deserves the maximum comfort for its guests. We expect our guests will find in a city center a pleasant new place to relax and enjoy excellent environment and food and drink offer.
Yes, this project will have the latest materials and technical solutions in order to provide energy efficiency. According to our newly-established regulations this object will have green passport. Regarding guests’ comfort, the latest standards will be applied, including Wi-Fi technology in whole object, autonomous information system in the form of „information boards“ that is the trademark of the brand, and that is in the reception area and in every room, from the TV screen, etc.
No, unfortunately. There are no either urban or technical conditions for that. There are the most restrictive rules about urban development in this city zone and we can’t go outside of existing building dimensions. Because of that we are forced to place part of equipment on the roof where it was situated for old object until now.
Training will start 6 months before hotel opening. There are developed standards for these hotels regarding number of employees and depending on local market development or qualified and experienced manpower availability, labor costs, the coefficients like „number of employees: number of rooms“ are determined. I expect that coefficient to be about 0,6 for our Belgrade hotel. That means 0,6 employee per key, or room. Since our hotel will have 114 rooms, it means it will have around 70 employees.
Yes, Belgrade is becoming more important destination in the segment you are mentioning. Our hotel is perfectly located if we keep this segment of the potential market in mind. Experience shows that main problem with these business oriented hotels in city centers is – how to fill in accommodation facilities during weekends and holidays, and „low“ summer season. In historical city center we certainly count on tourists which also recognize Marriott as a brand.
Hotel chains’ (as you call them) interest depends on investment activity on certain market. Leading hotel operators rarely invest their own resources in new facilities. Their activities are reduced to management contracts with investors like in our case, or franchise contracts with investors. If one of reasons we don’t have famous hotel chains is lack of resources on our market, other is our prejudice. Among potential investors which are ready to invest means in hospitality, there is even today widespread opinion that they don’t need expensive, foreign brands. In my opinion, hospitality is relatively simple activity with rules that are more or less well-known.
Honest attitude to work. To every (useful) work.
Serbia and Belgrade in particular, has significant „natural“ potential for tourism development. I am not speaking about natural beauties only, but also about cultural and historical heritage. Big investments in transport and telecommunication infrastructure and also in supporting service activities are necessary for tourism in order to become important industry. After that, it is necessary to establish new value system based on mentioned concept – honest attitude to work. This concept has the most direct implications in service industry, including hospitality. In my opinion, hotel management is actually details management. There is no good hotel manager that cannot notice and correct details. The good one will succeed to transfer this concept to his employees and this way service quality in this sector will improve. It means hotel management’s role is critical. I think Serbia has the potential for improvement in this area.
Belgrade is traditionally cosmopolitan city. Even during these hard times investments in hotel infrastructure development are evident. A lot of small, „boutique“ hotels have emerged lately and there are also significant investments in progress, including ours. Twenty years ago, with Hyatt’s entry into our market, we started to get high-quality personnel in middle management segment which was traditionally missing. Considering the general tendency, I think Belgrade is on a good way to have hotel infrastructure appropriate for a European capital of this size and potential. It would be great if the high-quality, well-educated and experienced hotel managers would spread from Belgrade throughout Serbia.