When opening a hotel, international chains bring along an entire team of around ten expats for key positions, like in the case of Radisson SAS, the latest project on Bucharest's five-star hotel market. However, after consolidating their position, owners start to rely on Romanian executives.
Four years ago, Marriott five-star hotel in Bucharest, with current turnover of 40m euros, had 15 expats in its management teams, whereas in mid-2008 the only "foreigners" in the company were general manager Kurt Strohmayer, the chef and the chief pastry cook.
Promoting Romanian managers is both a way to gain employees' loyalty and retain them and also a cost reduction method. According to a survey conducted by Mercer HR consultancy, a Romanian general manager gets annual salary package of around 180,000 euros, namely 15,000 per month.
By comparison, a multinational spends around 30,000 euros per month paying an expat filling a CEO or general manager position, namely 360,000 euros per year.
"As a rule, expats entail additional costs (...)," said Monica Dragos, HR manager with Radisson SAS, who specified, though, that the value expats create covers these costs.
Crowne Plaza representatives consider there is a tendency to promote local employees, with cost reduction as one of the reasons. Five years ago, the hotel had expats in the positions of CFO and sales manager, too, but these are now filled by Romanian managers. The hotel now has foreign managers only in the positions of general manager, food & beverages manager and chef.
Thus, the number of expats on the five-star hotel market has gradually decreased, once the hotels strengthened their position on the market.
However, foreign executives continue to play a key role when it comes to hotel openings.
Thus, Radisson SAS, the newest hotel on Bucharest five-star hotel market, with a 424-room capacity, has brought foreigners in eight key positions.
"It's important that expats, who are already experienced in the hospitality industry, should be part of the opening team. The expats we've brought have the role of sharing their knowledge and turning the hotel into a profitable business," said Monica Dragos, adding expats have the role of a trainer.
Foreign managers are also important when a hotel shifts from a franchise under a management contract. In the case of a management contract, the chain has greater power over the hotel. Besides this, Peter Martin, manager of Howard Johnson five-star hotel, believes there should always be some foreign managers in a hotel as this is an international business.
The domestic five-star market includes around 2,000 rooms, with 20% of this capacity covered by the recently opened Radisson SAS.
Besides Radisson SAS, the most important players on this market are Marriott, Howard Johnson, Crowne Plaza, Hilton and InterContinental.
Bucharest five-star market
- Includes around 2,000 rooms, with 20% of this capacity covered by the recently opened Radisson SAS
- Besides Radisson SAS, the most important players on this market are Marriott, Howard Johnson, Crowne Plaza, Hilton and InterContinental
- The number of expats on the five-star hotel market has gradually decreased, once units strengthened their position on the market
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