Operational Performance Overview on the Belgrade and Serbian Market

Belgrade Overview

 Belgrade Hotel lacks supply comparing to cities in the region in terms of capacities, quality of service and international chain presence.

   For example number of hotel rooms per citizen in Belgrade is 2.39, Zagreb 4.49, Prague is 16.35.

   All this suggests unique opportunity to exploit massive growth potential.

Yugoslavia will be Kempinski

Continental will be Crowne Plaza

Intercontinental right across Hyatt

Hyatt and Holiday Inn only chains that are operating

Other than these and Best Western all other Hotels are locally managed

Prospective competition

Belgrade offers 46 hotels with the total capacity of 6,229 beds.The four-star category takes up the largest share (48.21%),Followed by the three-star category (33.65%) The largest capacity is hotel Continental offering 750 beds

Belgrade Hotel Supply

Belgrade Hotel Supply 2009

33,65%

10,31%48,21%

6,90% 0,93% 1*

2*

3*

4*

5*

Belgrade busiest months are May and September and October. For example in May 2008 the total arrivals amounted to 42826 (11 559 local and 31 267 foreign) with 100 000 overnight stays.

Belgrade hosted Eurovision in May of 2008 which attracted 15000

tourists.

This year it is Universiada but the challenge is that Belgrade needs more events like these in order to boost room nights.

Demand

Over the last seven years Belgrade experienced steady growth of guest nights per year. It went from 1.20 in 2000 to 1.40 in 2008.

It is encouraging that number of foreign nights increased 48 % in 2006 to 62 % in 2007 and 66 % in 2008.

Demand is dominated by business travelers while transient category is the one with the biggest challenge and potential.

4 and 5 star Hotels achieve considerably higher occupancy rates across the board.

Biggest challenge is filling the weekends

Belgrade Hotel Demand

5* 4*

3*

2*

1*

0

10

20

30

40

50

60

70

80

1

Occupacy rate per Category

5*

4*

3*

2*

1*

•Due to limited supply of upscale Hotels, Belgrade Hotels features high rack rates.

•In 2009 the average rack rate for a single room ( b and B arrangement) was 235 Euros per person per day.•Four star Hotels feature the average single rack rate of 120 Euro per person while 3 star category records 50 Euros average daily rate.

Rack rates and forecast

Average Single Room Rate per Day

235

120

5036

22

0

50

100

150

200

250

5* 4* 3* 2* 1*

EU

R/D

AY

Revenue Management plays important role in Hotel’s successYIELD MANAGEMENT has

become an accepted part of thehotelier's lexicon. Yet if you ask tenhoteliers what it is, you are apt toget at least five, and possibly ten,

different answers.

Current challenges for better success are :Yield Management

is the practice of maximizing profits from the sale of perishable assets, such as hotel rooms, by controlling priceand inventory and improving service.

Yield management in Hotels in Serbia must be more worked on

YIELD MANAGEMENT

• Make sure that your staff always select the best possible rate • Handle early-bird and last-minute rates • Allow you to set different rules for different seasons • Handle selected days manually, e.g. so that only highest rates are

available for known peak periods, no matter what the occupancy is or how far in advance a reservation is made

• Use week and weekend rates • Let you program your strategies even for years ahead • Offer different rates and different special offers to different types of

guests • Can be used in a compulsory or advisory manner • Give an immediate red-yellow-green overview, depending on the

way you have defined the colour borders

Training programs are not established by many Hotels.

Same associates that were resolving guest challenges decades ago deal with them same way now.

How we can improve service in Hotels in Serbia?

Another Challenge ( Service Recovery )