For most people, the tourist season ends with the arrival of autumn. But not for the hoteliers.
Recently, at the head office of the management company Ribas Hotels Group, a meeting was held with the participation of General Director Artur Lupashko and Executive Director Andrey Marenchuk with the managers of twenty-five hotels that are part of the chain's management. After meetings like that the full picture of the past summer and the velvet season emerges.
Spoiler: there are enough problems.
However, the ostrich's tactic of hiding its head in the sand at the sight of danger is not included in the company's list of services. Therefore, we discussed the results of the season, problems and ways to solve them with Andrey Marenchuk.
Andrey Marenchuk-Executive Director of Ribas Hotels Group management company
— Andrey, I know that one of the most frequently asked questions from the media is "how was the summer season?". We have already discussed this topic with you in the beginning and middle of summer. Therefore, I guess that there is no need to complain about the filling up hotels, which means that there is no increase in income. Is that right?
"Yes and no. The fact is that the increase in revenue is observed annually. But this figure is not always comparable to the annual inflation rate. The latter may be within 10-15%. But at the same time, the hotel rate rises only by 5-10%. In other words, businesses still have to keep up with inflation. Especially the one that broke out in 2013-14. The good news is that we will catch up with it next year. With the most pessimistic forecasts — in 2020.
If we consider your question from the perspective of investment, we should remember that the biggest paradox of the Ukrainian economy is that we invest in dollars, but we get income in hryvnias. For example, we invested two million dollars in a hotel in 2012: hotel rates increased by 100%. Like here it is, profit! But the dollar soared by almost 300%… So we get an interesting arithmetic.
To sum up: compared to last year, we are in the black. The occupancy rate of our summer hotels has fluctuated at 68% this year. The most active months are traditionally July and August — 76%. June was a little slow in occupancy. It held at 58%.
The above factors, of course, have an impact on net profit.
"It is worth remembering that the hospitality industry, and in particular the hotel business, is one of the most profitable areas in the world."
And in Ukraine, even more so, given the low, compared to developed countries, the cost of construction, the cost of architectural projects and other items of expenditure.
"For owners and investors, this means the profitability of hotel real estate — 6-8 years and a yield of 12-16%."
Let me remind you that investments in the hotel segment are rated as the second most reliable after the garbage collection business.
If we talk about the season as a whole, it was extremely difficult.
— What criteria do you use to determine the degree of complexity?
— As I said on one of the TV channels, the booking period in the southern region has significantly decreased. And the early booking period, too. The average duration of booking this season is 4 days. Last year — 7 days. This is one of the main factors in evaluating the tourist market.
Karolino-Bugaz, Gribovka, Ochakovo, Zatoka and Koblevo became resorts of the last moment. That is, they are chosen because they could not go somewhere else. This is the most unpredictable marketing product in existence. It gets purchased last, because other factors did not work out: for example, there was not enough time to go to Egypt or Turkey for 10 days, so they go to Zatoka for three days.
Why were there queues at the Moldovan border on Thursdays and Fridays? Because people from Moldova were going for the weekend. But these are not tourists from Belarus or Ukrainian guests who came for 5-7 days.
— What is the reason for this?
— Resorts are not getting better or improving: hotels do not want to organize infrastructure around them, because they do not want to invest a lot of money.
This summer, a pool appeared in one of the Zatoka hotels. And the news about this spread to all resort facilities in Ukraine. Meanwhile, every second hotel in Turkey has a pool of this level. And we have this information served under the sauce of the wow effect. Conclusion: if you want to increase the profit of the hotel in the resort area, build a swimming pool on its territory.
There are very few seasonal hotels like this in Ukraine. And they stand out favorably from others: occupancy, pricing, and image. To stay a week in such a hotel, you need to pay more than 1.5-2 thousand dollars. And the tourist, by the way, gets only included Breakfast for this money.
In the fight for a guest who wants to come for 10 days, Ukrainian hotels often lose to foreign resorts. In addition, summer destinations have such a competitor with a rapidly developing region as the Carpathians. Mountains are considered not only in the perspective of winter Bukovel. Many Carpathian hotels began to use the summer season. We are still saved by the sea.
— This summer there was a lot of hype in social networks and mass media: they say that in Karolino-Bugaz and Zatoka it is very dirty and unreasonably expensive. What is your opinion on this?
— You may be surprised, but Turkey is not better than us in terms of resort and behavior on public beaches. But they are building large infrastructure hotels, from which it makes no sense for vacationers to leave. Guests are taken directly from the airport to the hotel. And they go out of it, at most, on excursions or authentic bazaars. When we have such complexes, I am sure that the hype will be many times less. But this will not happen soon, because investment is very slow.
In Turkey, they build a hotel with an average of 300 rooms, and in our region such a business is considered very large. As a result, if the hotel has a small number of rooms, it is unprofitable to build a swimming pool, install water slides and other entertainment infrastructure.
Take our direct competitors, for example. The Ruta resort complex is developing as a full-fledged infrastructure facility: it has a Ferris wheel, water slides, sports grounds, and children's animation. They allow themselves all this, because they can receive about a thousand guests at the same time. But Ruta also came up with this approach within 10 years. They systematically invested, improved, and left all the accumulated funds in this business.
— I admit that my interlocutors do not often use the experience of their business colleagues as an example. Although I have no doubt that your hotel chain also has facilities that you can talk about in this way.
— Of course, we also plan long-term investments. We carry out similar work in the Park hotel "Kiparis". This can be done on a large territory — more than 17 hectares, where you can add infrastructure and improve, probably indefinitely. This year we built a huge swimming pool with an area of 22x15 meters and a depth of 1.5 meters. Pavilions were installed, one of which was equipped with a modern training complex. The second two indoor areas are reserved for training large groups of athletes. We are also planning a huge update cycle next year. All this is included in the strategic development plan for 10 years, which we developed last year and are gradually implementing. This is difficult, because you have to invest what you have earned. But we see that this season has brought high results. This means that people like the resort and it needs to be improved. Moreover, do it correctly: do not force risks and do not invest large amounts at once.
Парк-отель «Кипарис» в Коблево
Парк-отель «Кипарис» в Коблево
Парк-отель «Кипарис» в Коблево
Парк-отель «Кипарис» в Коблево
We also carry out annual scheduled updates for all objects. Where necessary, we change the floor covering, room decoration, furniture, showers, faucets, update the Terry cloth, bed linen.
Is loneliness a trend?
— According to the latest reports Booking.com loneliness is actively coming into fashion. Do you feel a similar trend in your objects?
— Booking statistics are usually associated with indicators of global points of tourist business in Europe and other countries. Let's discuss why this is happening.
The principle of previous generations was to start a family, a house, give birth to a child, make a few repairs to the home, and then go somewhere. The journey turned into an event. Today's generation is quite different. It doesn't want to wait until the house is built, the children grow up and the salary will allow you to save for travel. Also, if we compare how the trend of marriage by age has changed over the past fifty years, we will understand why booking talks about loneliness as a trend.
According to the UN Department of economic and social affairs (World Fertility Report), since the seventies of the last century, the average age of marriage for a woman has fluctuated around 23 years. Men decided to go to the registry office at the age of 25 to 29 years. In the two thousandth, women raised their marriage threshold and got married at about 26 years old. Men married before the age of 32. In the modern world, the age difference for marriage is even more obvious. Women say the cherished " Yes " around the age of 29. And men - in 32-33 years.
Let's also recall that the Glion international University of hospitality in Switzerland recently published a report on generational change and its impact on travel. And the generation that is now actively traveling, considers it right to go alone. By the way, this generation is the most solvent. Because its representatives are people from 20 to 30 years old. They work hard and haven't started their own families yet. It turns out that there are a lot of single travelers who really spend more than family people. This is because they prefer to save time on cooking food and eat in restaurants, dress in branded stores, buy the latest gadgets, products in eco-packaging, and so on.
In addition, the largest travel market is business travel. Note that these are not tourist trips to get acquainted with historical sights. Business trips are one of the most expensive activities. This means not only meetings between potential partners, but also seminars, conferences, and other corporate events. We are at the stage of active development of the hotel business. Ukraine was one of the last countries to come to the conclusion that self — education is a mass trend. In the countries of Europe and the West, this is widespread and dictates a huge migration of corporates from different cities.
For example, since the beginning of the year, about five hundred employees of our company have attended seminars, round tables, and forums in Lviv, Ivano-Frankivsk, Yaremche, Bukovel, and Kiev. And there are a lot of such progressive companies. These people are also included in the percentage of "singles" reflected in the booking. After all, families or couples, as a rule, do not go to training.
But if we talk about traveling to resort hotels: summer or ski - of course, families or large companies come there.
— Has this season taught new lessons?
— Yes, it did. You'd have to be a fool to repeat the same mistakes. This year we made new ones. The direct and most effective benefit from them is the conclusions that we draw:
♦ Staff training.
At the beginning of the season, there were many layoffs during the period of adaptation of new employees. Therefore, we are actively working on a very important aspect-training and comfortable introduction to the work of beginners. After all, in fact, a person comes to our site from another city or corner of the country. And this is already a stress factor. We communicate with psychologists and recruiters from different companies to develop the most effective interaction formula. We plan to allocate HR with the function of a psychologist who will meet the newcomer at the facility, conduct conversations, talk about the internal structure and responsibilities. This will be the person responsible for their interests and emotional state. After all, the line staff works long and hard with people away from their families and home walls. I understand this very well, as I often go to sites and personally communicate with many employees.
This is probably the most important mistake that we made-we didn't get to the point where the new employee was comfortable.
♦ Housing for employees.
An undeniable advantage for the labor market was the presence of a staff hostel in the hotel. You will be surprised, but many employees agreed to work at the facility with a lower salary, but with the possibility of normal living. So that you can sleep in a comfortable bed, take a shower in a clean shower, and have a full meal in the dining room.
We are already building a modern staff hostel in the southern region. It provides a large common area for recreation, meals separate from guests, good showers, sparsely populated rooms for living with separation for men and women.
Горничная в отеле сети Ribas Hotels Group
We closely followed the salary statistics. More vigilant than hotel occupancy, perhaps. And during the summer, we raised the salaries of line staff by an average of 40%.
— What was the effect of these actions?
— I already said in an interview that I consider our summer facilities as children's camps and shifts. So I work with them as with children and counselors. This year it was hard for me to part with seasonal employees. This, in my opinion, is the best characteristic of team cohesion.
The percentage of employee returns increased by 38% compared to last year. And this is good news. Our HR Department predicts that about 67% of seasonal line staff will return to the facilities next year.
However, the biggest problem of the region and the country as a whole, which is sure to be repeated next year, will still be a personnel shortage. Over the course of a year, we must learn to respect and value our employees even more. How well we plan the adaptation system this year depends on what the next summer will be like for us.