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May 2015 Newsletter

Editorial

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

 

 

Cop out for Danes

The Mayor of Copenhagen has banned city employees from travelling on Ryanair flights. This applies to some 45,000 staff. The Mayor says the ban was imposed because Ryanair does not pay its staff properly because it won’t sign a Danish collective bargaining settlement. He added ‘we have fought hard against the scourge of social dumping, therefore we require all those who deliver services to the municipality, including those who sell us plane tickets, to offer their employees proper working salaries and working conditions’.

Point made.

 

‘’I’’ delay it

Replacing or doing away with paper ticks the boxes for social responsibility, however trusting technology to fully replace paper is always a touchy area, especially for non techno nerds. As if to prove the point, numerous American Airlines flights were delayed this month when the pilots ipads crashed! The airline had replaced paper based information documents and navigational charts with ipads two years ago in an effort to save money. The airline stating that the ipads replaced 24 million paper pages of information and would save the airline 400,000 gallons of fuel each year in reduced weight loads.

It didn’t prevent flights being cancelled though.

 

Letters a profit centre

Almost half way through the year and the leader so far in the award for absolute brazen cheek in the drive to make more profit is: Easyjet. They are charging passengers 10 GBP (12 Euro) who, for insurance purposes, request confirmation from the airline that a flight was delayed.

Maybe the people who dream these things up should try for a career as the Bulgarian Government Finance Minister. The country would then become one of the richest in Europe, though no doubt the people would be poor (er) through a myriad of questionable new taxes.

 

Beam me up Scottie

Apologies for anyone not familiar with the Star Trek movies but hotel group Starwood, perhaps better known locally for the Sheraton brand, are now allowing guests to skip front desk queues and open their allocated rooms if they have a new Apple Watch ’app’.

The room details are automatically sent to subscribers who can then simply tap the door with their wrist to enter the room. The app also allows guests to see general hotel information and the actual booking details.

Does anyone else think that all this technology is becoming confusing? Or is it an age thing?

 

A birdie for the airlines

Airlines ability to excuse themselves from paying compensation to their clients is legendry. Legislative bodies such as the European Commission have gradually brought the airlines in line with rational behavious and still the airlines will try and find any excuse ‘”not to payout’’ if they feel they can avoid it. However the latest setback for the airlines has seen a UK court rule that a bird strike is not such an ‘’extraordinary’ occurrence. The word ‘”extraordinary” being the key word as airlines regularly use this ‘get out clause”’ whenever they can – even if the pilot is late for a flight!

The judge making the ruling said that the word extraordinary meant something beyond unexpected, unusual or rare. To make his point he cited that two cars crashing maybe unusual but a car crashing with a horse would be ‘”extraordinary’”. For the airlines, bird strikes occur every day as the skies are populated with birds and so they (bird strikes) are not extraordinary!

We think he has made the point clear!

 

 

Amaz-ing it took so long

Online hotel sellers will have shuddered with the news that Amazon has, after years of threatening, started to sell hotels. So far the giant is focusing on hotels in selected cities in the USA but almost certainly this is the testing ground for bigger things.

Expedia and Booking.com will no doubt be anxiously looking over their shoulders.

 

 

Online in danger

The ultimate utopia for any airline or hotel is for all their clients to book direct with them; this way they can yield more money: simple as that. Whilst the travel community can and does put a spoke in this concept, the biggest spoke in the wheel for hotels and airlines are the online retailers. The reason being, that airlines and hotels struggle to control or have influence on them. In the USA though, Delta Air Lines has found a way to deal with online sellers; they have removed access to their flight data.

Online travel sites such as Tripadvisor have been significantly affected with Delta taking the stance that ‘”they can determine who it does business with and who it doesn’t”.

One can see this and similar scenarios starting to make the legal profession a wealthy one in the next few years.

 

 

More space coming overhead

Ever sat on a plane whilst it’s filling with passengers and wondered just how big a bag people will continue to pass off as hand luggage? The attempt to get ones lifetime possessions into an oversized multi stripped beach type bag and then try and squash it into the overhead baggage compartment is pure entertainment on some flights, especially from certain Eastern European Markets. Therefore the news that Boeing are making the overhead baggage bins 50% bigger means that either a) more people can get their (genuine) hand luggage in them or b) people can get more of their lifetimes possessions into even bigger bags and then try and squash them into the overhead bins.

Whilst the thinking of Boeing might be logical, one wonders if during the application, the theory will be different to the reality?

 

Cuba by Ferry

Relations between the USA and Cuba are getting better almost by the day. Further evidence of this is the announcement that the US has started to give out ferry licences in preparation for passenger ferry services between the island and Florida.

The start of these ferry services may however still be a short while in coming as customs and immigration infrastructure will need to be put into place on both ends of the chain.

Still, the clock is ticking and it’s now only a matter of ‘when’ and not ‘if’ such a service will begin.

 

1 – 2 – 3 Gone

Algerians have discovered a smart way to illegally enter Europe (without a boat). Three of them opened an aircrafts emergency door as the plane taxied down the runway in Rome and made off never to be seen again.

The trio had arrived from Algiers having bought a one way ticket to Istanbul where the plane was heading to after a lay over in Rome.

Apparently authorities in Rome are aware of this problem yet still could not or cannot find a way to stop this re-occurring.

 

 

EW 4U

Lufthansa’s short haul subsidiary Germanwings is to ditch its name by the end of the year in favour of the Eurowings brand. The move was, supposedly, already on the table before the recent crash of the Germanwings plane in France.

In fairness to the spin doctors, Lufthansa did have some overlap of brands with these two names and so the move is part logical and part enforced.

By autumn the 4U code of Germanwings will be replaced by the EW code of Eurowings whose first base will be in Vienna.