Seaside hotel businesses mean considerable annual investments that are difficult to recoup during the brief season on the Romanian seaside, says Mohammad Murad, chairman with Perla Majestic Group hotel firm.
The various problems seaside hotel owners experience are not merely related to internal organisation, but also to market conditions independent of their decisions. The problems include the low investments in infrastructure, the lack of skilled workforce or the gap between investors' and local authorities' interests, says Murad, quoting however, as one of the most serious problems of Romanian tourism, its bad image abroad.
"An 'internationalisation' would have benefited the Romanian seaside. I would have been very happy to see international hotel brands such as Sheraton, Hilton or Kempinski at the seaside now. The fact that they have not arrived yet means the Romanian seaside has not reached the potential they need, yet," says Murad. In terms of the frequent mistakes seaside hotel owners make, one can speak of a lack of communication and most importantly, of a wrong positioning on the market and of too little flexibility.
Perla Majestic Group (PMG) has operated investments in the hotel sector both on the seaside, as well as in Bucharest and outside the capital city.
On the seaside, the company operates the following hotels: Majestic Mamaia (a four-star hotel), Majestic Jupiter (a three-star hotel under refurbishment), Perla (a three-star hotel) and Majestic Olimp (three stars).
The company operates over 2,000 accommodation facilities in hotels, in around 1,000 rooms and suites. According to Murad, the company he runs has invested around 90,000 euros this year in the renovation of each seaside hotel.
Thus, average annual investments are likely to reach 360,000 euros for renovation and strictly necessary furnishings, according to the company's representatives. On the other hand, the cumulated revenues the seaside hotels generated last year did not exceed 3 million euros, according to PMG.
Beside the 4 hotels, PMG owns 10 apartment complex projects on the seaside, in various finalisation stages. These complexes include a total number of around 1,000 housing units, of which around 50% are in a finishing stage, say the company's representatives.
The company also owns Coral Beach holiday apartment complex, finalised in 2003, and Summer Land, finalised in 2005. This year, it will complete the Summer Land II project, operating another 400 apartments.
Prices of Summer Land II apartments range between 900 and 1,200 euros per square metre, and investments amounted to about 12 million euros and were financed by Piraeus Bank and by private sources, according to PMG chairman.
PMG's most recent hotel investments are four-star Phoenicia hotel of Bucharest and a new project in Otopeni.
PMG
Operates investments in the hotel sector on the seaside, in Bucharest and outside Bucharest
Owns four hotels on the seaside, with the average annual investments in each of these hotels coming to 90,000 euros
Owns 10 apartment complex projects on the seaside, in various finalisation stages
Overall investments in the apartment complexes may hit 100m euros at the moment these are finalised
For Summer Land II, investments reached some 12m euros
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