Interview with Lior Bebera, General Manager InterContinental Bucharest
How was 2018 for InterContinental Bucharest’s businesses, what segment of business saw the strongest growth and why?
In 2018 we managed to achieve a healthy increase in total revenue due to a growth of 2.5% in average room rate and the meetings & events business, which led to an overall increase of 4% forecasted by the end of the year.
The leisure segment continued to contribute significantly to the development of the market during the first 9 months of 2018 and it was the main driver for occupancy especially during weekends, whereas the corporate meetings segment helped in building both occupancy and a satisfactory rate growth during weekdays. The MICE business and the private events (weddings, baptisms and anniversaries) are also on a positive trend and have added to the revenue increase.
What challenges did you face this year?
The biggest challenges for 2018 are the prevailing staffing shortages, the high increase in costs and the lack of predictability of the economic environment coupled with an insufficient involvement of the local authorities in tourism promotion. All these factors impacted the profitability of the hotel as our rates were already in line with the market average and we could not increase them further in order to cover inflated costs of utilities, manpower and purchase costs of food products.
For example, to cover the daily operational needs in terms of workforce, we had to be creative and started hiring non-native people on entry levels with higher costs attached. Additionally, we seized the opportunity of hiring talented young people from abroad through the “IHG Future Leaders Programme”, a talent nurturing project designed by InterContinental Hotels Group. The latter is a win-win situation as our colleagues gain experience by working in one of the best InterContinental Hotels in Europe and we maintain our high quality services by working with educated, talented young people, the next generation of leaders in hospitality.
The anomaly we have experienced in 2018 is that we achieved higher revenues on a growing market; however profitability ratio is unsatisfactory and difficult to explain to company stakeholders, be it owners or colleagues, due to unforeseen significant cost increases and an instable economic environment. These two characteristics of 2018 big picture, which are out of our control, have impacted industries on a much larger scale and make it difficult to predict trends and develop appropriate business strategies.
What is your plan for 2019 at InterContinental Bucharest, what segment you would like to further strengthen? What KPIs matter more for you in 2019?
The market shows growth and has reached maturity with an annual average occupancy rate of over 80%. This will help us focus more on the rate increase which will be the sign of an even healthier market and can drive the revenues needed to cover such cost increases as mentioned before. Now is the right moment to further strategize our approach and to aim winning the right business in order to maximize revenues in 2019 while striving to provide the best services and most memorable experiences in town.
Nevertheless, our endeavors and thorough planning strongly require combined efforts from local authorities and institutions in order to effectively drive the growth of a city and a country that show great potential for tourism.
In 2019 Romania will hold the EU Council presidency for the first six months and in September will host the famous ‘George Enescu’ International Music Festival. Such large city wide events trigger high occupancy levels and good business potential throughout the year especially for segments such as MICE. If things are well taken care of by the Romanian governmental institutions and head towards the right direction I believe these are key opportunities to show-case what this country can offer.
As a key non-financial objective, I will continue to count on new talents to start or develop their career at the InterContinental Bucharest, a true IHG Academy hotel.
InterContinental is a symbol that outdistances the accommodation market in Bucharest and Romania, a true witness to Romania’s modern and intense history in the past 47 years. How is this reflected in the hotel’s operations and marketing strategies?
I truly believe the team is the key to success. The power of this hotel as a symbol of the Romanian hospitality transcends its functionality and raises the expectations of all our stakeholders – guests, business partners, colleagues and owners. Since 2007, when IHG started to manage the hotel, it has been extremely important to consistently provide a high level of service and to proudly represent our brand at local level. We owe this achievement to our people and their genuine talent to work in hospitality, their wish to build a career in this industry and not seeing it just as a job.
I am very proud of my team in Bucharest. They are a very strong group of individuals who form a solid unit and who succeeded to win the Hotel Team of the Year award at Romanian Top Hotel Awards. Thanks to their passion and professionalism, InterContinental Bucharest is one of the best performing and mostly awarded IHG hotels in Europe.
For the first six months of 2018 we achieved a prestigious Elite brand status for the 94% guest satisfaction level voted by our guests. On TripAdvisor, InterContinental Bucharest leads the ranking of the international 5* hotels and received the award for TripAdvisor Travelers’ Choice 2018; we were nominated and have received prestigious awards: Luxury Country Hotel for Eastern Europe at the World Luxury Hotel Awards or Haute Grandeur Awards.
As a proof of their knowledge and professionalism InterContinental Bucharest team was part of several task forces within IHG such as the pre-opening and opening process of InterContinental Sofia and InterContinental Ljubljana or in assisting our sister hotels in Berlin and Davos through high level events. On those occasions our colleagues have won international exposure and recognition of their experience.
Our marketing strategy included the implementation of successful concepts in partnership with strong brands like Veuve Clicquot for the Corso Summer Terrace, Stretto coffee for the Intermezzo Lobby Lounge or Noriel and Itsy Bitsy radio for our famous Sunday Brunch.
What are the novelties in terms of customer experience at InterContinental, in order to differentiate on the local market from other hotels?
To refresh our food & beverage concepts, we have recently re-launched our Sunday Brunch and teamed up with famous partners like Noriel and Itsy Bitsy Radio in order add extra value to the concept and enhance the kids’ experience.
At the Intermezzo Lobby Lounge, in the hotel lobby, we now offer a special personalised coffee that allows you to print your selfie or a message. We have also continued our project of promoting young Romanian artist and we organised lobby art exhibitions.
Moreover, we are preparing a surprise this year end, a glamorous New Year′s Eve show in Ronda Ballroom with a fancy six-course served menu and a themed party called Great Gatsby, starring Loredana.
For next year we are in the process of launching a special programme for our most loyal clients and we plan new food and beverage concepts for our restaurants for the second half of 2019.
What are your feelings regarding the evolution of Bucharest as a market for business tourism and which are the mechanisms that could support the city’s further growth in terms of tourism?
Bucharest is becoming visible on the tourism map, but to grow further more, it is required that the authorities combine their efforts to promote the destination and develop facilities for tourists that are in line with other European capitals. Whether it is a tourism office or an official online city app with all kinds of information about the city, advanced technologies must be a large part of the plan in order to become a tourist friendly city.
The tourism sector in Bucharest has a great opportunity during next year, thanks to the European Council presidency, ‘George Enescu’ International Music Festival and, in 2020, with the European Football Championship. I truly believe that if authorities are wise enough to put the country′s best interest above their different political opinions they will be able to focus on finalizing the infrastructure needed for a smooth roll-out of these large events.
We now witness a momentum that Romania should not lose – a high interest in Eastern Europe as being the next „place to discover” due to affordability, safety and the natural beauty it holds.
The other bottleneck – the education in hospitality seems to be on the right track with the implementation of the dual system education. We need well-educated young people in hospitality, fluent in at least one international language and prepared to serve affluent international travelers, showing them our true hospitality.
You have worked for multiple hotels within InterContinental hotels. How different or challenging do you find the Romanian experience compared to the other countries? What would you say are the differentiators of the local business market?
There are similarities in the industry as we share the same international travelers, but the mentality and culture are different here from Ukraine, Malta or Germany. The market here is a corporate market with the leisure segment growing year after year, so we have to adapt our facilities and services to the leisure traveler – providing more entertainment options in the hotel, developing new trendy concepts in our restaurants & bars or being more knowledgeable about the city and what it has to offer.
Two years have passed already since you have been appointed at the helm of InterContinental Bucharest. If you are to compare your expectations and thoughts of January 2017 to those from now, what changed, what surprised you and what are your hopes for 2019?
To end in a positive way I will start with the negative part that doesn′t stop to surprise me since I am here: the lack of financial predictability, the economic instability that undermines our business efforts. On the positive side I would mention the people – the team and the Romanians in general, the natural landscapes of the country and the huge potential for Romania to become the next “must-see” destination on every traveler′s agenda.
