After Orbis took over the management of AccorHotels in Eastern Europe at the beginning of 2015, the group is now talking concrete expansion plans on the local market.
Hotel group Orbis has announced that in the second quarter of 2017 it will open the first ibis Styles hotel in Romania, in Arad, and that later the same year it will open a Mercure hotel in Brasov. Orbis is the exclusive licensor of Accor brands such as Sofitel, MGallery, Pullman, Mercure, Novotel, ibis Styles, ibis and ibis Budget in 16 countries in the region including the Baltic States, Poland, Hungary, the Czech Republic, Slovakia, Romania, Bulgaria and Macedonia.
Both units will be newly built and will be opened under franchise agreements. ibis Styles in Arad will be a three-star hotel comprising 72 rooms while the four-star Mercure in Brasov will include 120 rooms.
Beyond 2017, the company is looking at Bucharest, Timisoara, Cluj-Napoca, Craiova, Oradea, Iasi, Pitesti and Ploiesti for further openings, Gilles Clavie, president of the management board and CEO of Orbis Group, told BR.
“After Orbis took over the management of AccorHotels in Eastern Europe, we are now entering a new development phase in the region. Romania, with its growing GDP and improving market volume, is one of the key markets in the region and an important element of our development strategy,” he said.
At present there are seven Accor hotels in Romania – four Ibis units, a Novotel, a Pullman and a Mercure which was opened at the end of 2014 – but Orbis plans to push the pedal on expansion and wants to reach the “leading position in the next four, five years”.
“We are considering opening new hotels in Bucharest as well as outside the capital. Romania is a large country with significant domestic demand, with a mix of pure leisure in the Black Sea and the western part of the country and business in Bucharest,” said Clavie. In his opinion the local hotel market offers a “very good balance” between leisure and MICE (e.n. meetings, incentives, conferencing, exhibitions) and between domestic and foreign tourists. “The market is not totally dependent on the international market, and this is a huge advantage,” he added. Orbis says the mid-scale segment of the market offers particular growth potential for brands such as ibis Styles and Mercure.
Future expansion will be done mainly through franchise and management contracts as Orbis says the chain is seeing increased interest from developers in hotel investments. “As the hotel industry is closely linked to GDP growth and the macroeconomic environment, we clearly see a rising interest from individual and institutional investors. The hotel market in Romania is quite fragmented with the presence of local hotel operators and limited sized hotels, so we see space for international brands’ presence,” he outlined.
However, the company doesn’t exclude the possibility of investing its own funds in hotel developments. “We are ready to work with local business partners under management and/or franchise contracts. But I do not hide that we are also considering opportunities in primary locations with the possibility to get the most of the capital employed,” he concluded.