„We are pleased with the results achieved by our hotel business last year which was extremely dynamic for Delta Holding. Our hotel business is a very significant and profitable segment for us, and we want to further expand it in that direction. In the upcoming period, we are planning to open hotels in Belgrade and Ljubljana, as well as reach an agreement with the Belgrade authorities regarding the concession for the Sava Centre,“ says Vice President of Delta Holding, Živorad Vasić in an interview for InFocus America.
Delta Holding has expressed its interest in the Save Centre. What is happening with that and how much money do you need for investments?
— The story with the Sava Centre has been going on for a very long time and the talks with the Belgrade authorities regarding this issue have been continued. The city’s decision is not to invest in a public-private partnership, but to opt for concession. Such development suits us for two reasons. The first is that we have already seen the implementation of various concessions, such as Belgrade Airport and garages in Belgrade. The second reason is that concession is not a partnership deal, but rather Delta Holding would manage the Sava Centre independently for a number of years. And we have a clear picture of how to manage this congress centre independently, with clearly defined obligations. I think that the city government is also willing to go for this option. On the other hand, the required investments in the Sava Centre amount to about EUR 25 million, but we believe that they should be somewhat higher. We have devised a business plan which stipulates the amount of EUR 35 million. With this amount, the Sava Centre can be improved to fully fit its purpose, whereby it would remain the same on the outside and would be completely renovated inside.
You opened a hotel in Ljubljana and announced the opening of yet another one. You also currently have two hotels in Belgrade. Are you satisfied with the achieved business results?
— First and foremost, I would like to announce the opening of the Indigo Hotel in January 2020 in Knez Mihailova Street. The works on the hotel are in their final stage and we are very happy that we will have another hotel in Belgrade. If you compare the markets of Belgrade and Ljubljana, the number of overnight stays is higher in Ljubljana, but on the other hand, the hotel business in Belgrade is improving. An increasing number of tourists is coming to the city, while the number of overnight stays is also growing. However, what Belgrade needs are more events. Regardless, we have generated a higher profit again, with the average occupancy of our hotels being 79%, which is an extremely high percentage. We are continuing with the development of our hotel business. We bought another land plot in Ljubljana, and as for the hotel in Novi Beograd, we have made substantial progress in obtaining location and building permits. As of January 2020, we will have three different brands and hotels under the umbrella of the InterContinental Group – Holiday Inn, Crowne Plaza and Indigo. We hope that next year we will begin to build the fourth hotel – InterContinental Belgrade – which would be the crowning achievement of our hotel business. With these four hotels, we will round off this segment of our business and cover the accommodation needs of the guests who come to Belgrade. As for Ljubljana, we are planning to build a Holiday Inn Hotel there. I would also like to underline that our hotel business is very important and very profitable for us and that we want to expand it in that direction.
You sold the Park Hotel in Belgrade in January this year. Can you elaborate on this decision?
— The Park Hotel did not fit into our business concept. There was no possibility to convert it to resemble the brands of the InterContinental Group, as its rooms are very small and do not meet the relevant standards. The decision to sell the hotel was a strategic one which was carried out as soon as we got the asking price for it.
In several interviews, you talked about the lack of workforce in the hotel industry. What is the solution to this problem?
— The lack of workforce is a problem that is noticeable in entire Europe. It’s hard to find good managers, chefs, waiters and maids. This problem is even more pronounced in the European Union. We are one of the very few companies in Serbia, perhaps the only one, that provides its employees with an opportunity to grow and change positions, without leaving their hometown. We like to hire people who have no work experience and have just graduated from school because we can teach them about standards from the very beginning. On the other hand, our company has a clear goal and strategy that entails taking care of our employees through different activities. I think that Serbia is ready to pay more for lower job positions and that wages in the hotel industry will go up soon.