Bedding down to the future

The Kempinski sign has finally come down from the hotel perched on the hill off to the right as you head up Cherni Vrah Blvd. The new owners, the Victoria Group who already own several high profile hotels across Bulgaria could not come to an agreement with Kempinski hotel Management Company regarding how the facility should be operated. Depending on whom you believe, the reason can be attributed to money, management style or anything else you wish to mention. This also follows on from the relatively recent withdrawal of the Sheraton name from the hotel located opposite Tzum in Sveta Nedelya Square. If these descriptions sound a little farcical, its done deliberately to emphasise the point that we have come to identify these hotels as ‘The Sheraton’” and ‘”The Kempinski”, referring to them now as ‘The Marinella’ and ‘The Sofia Hotel Balkan’” is likely to draw blank looks from many of the local population.

The merits of ditching any global brand can only be assessed sometime in the future, one assumes that the owners of the respective brands, hotels in this case, have a business plan they think will work in their properties and it may well be true that this business plan falls outside the box of logical thinking.

Branded hotels are usually the first hotels people look for when travelling to a new destination and even when travellers become familiar with a location, they invariably ‘trust” brands they know. The withdrawal of the Kempinski and Sheraton brands means that there are now just two deluxe hotel brands in the capital, namely the Hilton and the Radisson and it will be interesting to see if they benefit from these moves.

The location of the former Sheraton hotel is still a landmark and one wonders if that alone will support its economic viability. The hotel, once seen as being a ‘”grand old dame’” is now more akin to a shopping mall but if, at the end of the day this works for the hotels owners then so be it. It will always be close to government offices so in theory a client base sits on its doorstep.

The former Kempinski building is also prime location and if, as reliable hotel analysts say, the hotel needs some 40m Euro spent in it to bring it up to international five star standard, one wonders if there is a Plan B or even a Plan C?  Plan B could be to ignore the five star hotel market that frankly Sofia is not suited to nor can it support in worthwhile numbers (think room rates in excess of 200 Euro a night in most capital cities) and downgrade itself to a lesser rating but with all the bells and whistles attached. Plan C may be the most interesting however. This could mean altering the structure of the facility and maybe even building onto it new bricks and mortar that would form a mixed use facility.

A mixed use facility could include some or all of; office space, long stay serviced apartments, private apartments and standard hotel rooms. It may even be argued that it could be cheaper to pull the existing building down and build a totally new one that’s ‘”fit for the purpose’’ as opposed to modifying the existing bricks and mortar. This type of facility is now common in Asia and the Middle East and has is also being in Europe by some of the traditional hotel management companies such as the Marriott who find this formula successful in main or capital cities.

Mark Thomas

Managing Director

HRG Bulgaria