Conference and banqueting services account for between 30% and 50% of the turnover generated by five-star hotels in Bucharest. Investments have been made in conference halls and ballrooms by hotel owners, in reaction to the lack of such investments on the part of the municipal authorities.
The event market in Bucharest is dominated by five-star hotels, as there are no facilities provided by the municipal authorities, and no indication of a private investor having plans to build a conference centre.
The contribution of the conference and banqueting segment and of the food & beverage (restaurants and catering operations) segment make to a hotel's turnover depends on the hotel's location, the number of conference and banqueting rooms available, and on how well equipped and organised the respective units are.
Mihai Rajnita, general secretary with the Federation of the Romanian Hotel Industry (FIHR), says that for this segment to be profitable, the hotel needs to have modular halls, with no pillars in the middle, which are located in a separate area, away from the hotels' regular customers.
In the case of the Intercontinental- which has six conference halls, the smallest number of conference halls on the market of five-star hotels, the conference and banqueting segment contributed to just a third of the 13 million-euro turnover the hotel posted in 2006. However, in the overall revenues recorded in 2006, the event segment witnessed an increase of 25% against 2005, according to representatives from the hotel.
JW Marriott Bucharest Grand Hotel, Bucharest's largest hotel, owns a conference and banqueting area covering 2,000 square metres. Conference and banqueting services account for around 20% of the hotel's total revenues. In addition, the hotel owns 5 restaurants and bars, whose revenues, along with the banqueting operation revenues account for 40% of the hotel's turnover in 2006.
In the case of the Howard Johnson Hotel, conference and banqueting services generate 40% of the total revenues, too, according to previously released information. The representatives of Ath?n?e Palace Hilton Bucharest did not provide any estimates for the contribution of such operations to the total turnover, which stood at about 35% in early 2006. For the Crowne Plaza Hotel, events and conferences along with the food & beverage services accounted for 50% out of the over 50 million-euro turnover it generated in 2006.
According to players on the hotel market, the contribution of conference and banqueting services to turnovers is likely to increase in the upcoming years, as domestic companies begin to develop.
In Rajnita's opinion, the revenues generated by the events segment could also be boosted by the municipality, who could provide facilities such as an international conference centre for major events in the future.
Due to the lack of such an investment, five-star hotels are finding solutions to make the most of their existing spaces. In reaction to the increased demand for events areas, 3 and 4-star hotel owners have also started investing in this segment.
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