Radisson prepares to expand despite world financial crisis
Oct. 29, 2008, 9:34 p.m. | Business
— by Jonathan Holmberg
Q&A with Klaude Bulte, general manager of the Kyiv-based SAS Radisson, who is optimistic about hotel expansions despite world financial troubles
Klaude Bulte serves as general manager of the Kyiv-based SAS Radisson, a member of the Rezidor Hotel Group.
A native of Belgium, Bulte arrived in Kyiv this summer to manage Radisson hotels in the country after a decade of experience within the group. Most recently, he managed the Reykjavik Radisson in Iceland.
In this Kyiv Post interview, Bulte said he has noticed that world economic and financial troubles are just starting to affect business. But, he remained optimistic, saying that the Rezidor group plans to open several new hotels in Ukraine in the coming years.
KP: What has Radisson’s experience been in Kyiv?
CB: We’ve now been open for three years. We were the first international chain to open a hotel in the four-star segment. At the moment, 95 percent of our clientele are business travelers from the United States, Britain, Europe and Russia.
Kyiv is an unknown tourist destination, but has high potential. The government just needs to promote Ukraine better.
KP: What is your occupancy rate?
CB: During the business week –Monday through Thursday – we are nearly fully-booked. Overall, our weekly occupancy is about 65 percent.
KP: How is the ongoing financial crisis affecting your business?
CB: We are looking very closely at our business segments. The banking segment is being hit hard at the moment.
You will also see construction-related business go down, because if you cannot borrow money, it is difficult to invest in new development.
We do expect that the crisis will change people’s behavior when they book hotels. Money will become a key consideration, and they will reconsider booking a reservation in a five- or four-star hotel.
At this point, we do not know how far it will go. But what we are seeing is that bookings are coming very late. People have become much more careful about booking in advance.
KP: So will this put downward pressure on hotel rates?
KB: Compared to other cities, Kyiv is highly-priced. But the prices are a reflection of the market and the relatively low level of competition.
KP: Regular travelers to Kyiv opt for apartment services. Are you in direct competition with them?
KB: Definitely. We notice that those who travel here a lot are definitely looking for long-term and less-expensive options, like apartments. The apartment services have also become more sophisticated with their advertising and English language websites.
KP: Is the Rezidor Hotel Group planning any projects in Kyiv?
KB: Yes, we are looking at four properties for our three star Park Inn product. The first will be near Boryspil. Ground has already been broken and it should open in two years. The other three locations will be announced when the papers are signed.
Our group believes that Ukraine’s three-star segment is underdeveloped.
KP: Do you expect the arrival of low-cost airlines to stimulate the tourism industry in Ukraine?
KB: By itself, no.
The infrastructure needs to be significantly improved. For starters, the airports need to be modernized. I come from Iceland, a country of 350,000 people, and its airport is much larger than the one in Kyiv, and very modern.
Secondly, there need to be many more three-star hotels available so that people coming here for a short vacation can stay somewhere for a reasonable price.
Lastly, the country needs a comprehensive promotion campaign.
Ukraine will have a chance at becoming a significant tourist destination only when these steps are taken.
KP: What is your mid-term forecast for Kyiv’s hospitality market?
KB: There will be many more international hotel chains opening operations in Kyiv and throughout the country. This will be good for Ukraine. It will drive up competition and lower room prices. It will attract more visitors and provide a boost to the country’s lagging tourism industry.
But to speed up this process, Ukraine must stabilize its government and reduce the bureaucratic red-tape that significantly delays and curtails hotel development projects.