How to choose a location for a new hotel?
The Legal Bridge Lawyers company has been working for a long time with best hotels in Ukraine and abroad. We get our readers acquaint with the most interesting features of the hotel business. Just recently we wrote about the security measures in hotels. Today – we will tell about the process of selecting location for building a new hotel. For this reason we have talked to David Jenkins, Vice President for Business Development, Ukraine, Russia, Baltics, Georgia and CIS, The Rezidor Hotel Group.
LB | Journal: What criteria do you have for the locations of new projects?
DJ: Given that we already have a strong presence in Ukraine, and have been looking into the market there for 15 years now, we have target cities where we would like to be. Then, within those cities we would look at projects that are close to ‘demand generators’. So this tends to be city centre, airport, coastal (for resorts), close to exhibition centres and so on. Each project is unique so you need to take a fresh look each time.
LB | Journal: What requirements do you have as for the ranking demands? Which of them are optional and which are obligatory? Is there any list of requirements in which some requirements are obligatory and some can be optional? Maybe for the Radisson Resort more important is the nature around and for the Radisson Hotel (where lots of business events are held) more important is the network around (restaurants, shopping malls, etc.).
DJ: When looking at a new hotel we always need to ask ourselves where are the guests coming from? So for a city hotel the hotel needs to be visible – front line so that people can see it and find it easily, there should be offices and similar demand generators in close proximity- or tourist attractions. For resorts you always need to consider ‘sense of arrival’ for the guest – how do they get there – what is the arrival experience going to be, who are the neighbors, what is the view and so on
LB | Journal: What are the differences between demands regarding different countries? Is the standard the only one? Is there the only one list of requirements for the Radisson Hotel in every country, or maybe in some countries the list of requirements may depend on some legislation (state standards) or maybe traditions of a country where the Hotel is going to be opened?
DJ: We adhere to our own brand standards in terms of hotel construction and design – and always to local legislation in each country where we operate as a global company. Within hotels we also have standards for breakfast – which differ between a Park Inn by Radisson, Radisson Blu, Radisson RED etc., we will incorporate local cuisine onto menus, add certain spa procedures based on location – what may work in Bukovel may not work in Mauritius for example. We always need to reflect our location – be it the country, the city or the micro location – but always working within a set of brand standards that are defines in order the guest has consistency.
LB | Journal: Whose decision is the last as for the hotel location?
DJ: It is my role for my region to approve our choices on projects that we accept, following this we also receive approval from our HQ in Brussels
LB | Journal: Who is responsible for the demands statement? Are there any time changes? Is it one person, who is obliged to compose and certify this list or is it a structure which consists of lots of people, who have different obligations like monitoring of countries, legislation, etc. and after all these things a Director or the Board of Directors may certify this list? Is this list the only or it can be changed time after time?
DJ: Rezidor has an executive committee who work to determine our brand standards and within each region we have Area Vice Presidents who look after the operations of our hotel and ensure local compliance.
LB | Journal: Which demands are the most awkward or surprising? Maybe some of the requirements may be awkward or surprising for the hoteliers (I know that the Hotel can be opened like a franchise network)? For example, if I want to be an owner of some Radisson Hotel which requirements can be a surprise?
DJ: We are highly transparent when we engage in conversations with potential owners – and outline all the fees and facts related to either a management agreement or a franchise – and in certain markets a lease. We work on long term contracts 20 years and up. I cannot say that there are surprises and we always help owners to understand the contractual obligations well in advance.
LB | Journal: What are the differences for location demands for various hotel networks?
DJ: I cannot speak for other hotel groups but from Rezidor’s perspective, the actual location for the hotel will determine to a great extent the size of the hotel (number of rooms), mix of rooms (double v twin v family v suites v apartments etc.), type and mix of facilities (number and style of bars and restaurants, meeting and event facilities, fitness, spa, parking etc.). If a hotel is near an airport then it requires many smaller meeting rooms and air crew lounge for example, of it is close to an expo centre then you need significant meeting space, if it is downtown then perhaps it needs a specialty restaurant or a roof-top bar. All these are factored in based on location.
So for our resort in Bukovel we determined that we needed a large spa, an apres ski venue, winter and summer activities to ensure it works in all seasons. Sometimes the location itself can limit the facilities as it may be an existing building (historical or otherwise) or a smaller construction site – which is common in Kyiv. We have more business class rooms in Kyiv than in Bukovel since Kyiv is mainly a business destination. Bukovel on the other hand has family rooms and spa suites that you do not require in a city centre location.
LB | Journal: Is the information regarding searching of locations confidential?
DJ: We maintain confidentiality about the projects we are discussing and negotiating until contracts are signed, then we make public announcements.
LB | Journal: What are the eventual consequences in case of wrong decision taken?
DJ: The goal is not to make such wrong decisions. We have project approval committees and systems in place to ensure this does not happen.