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  Vol. 11, No 1, 2004
Getting Heads on Beds

Hotels struggle to survive as the number of rooms doubles in the space of a year

Helena D˛iautas

It’s been a cold winter season of the survival of the fittest. As many as 18 freshly renovated or brand-new hotels have swamped Vilnius in the last 12 months, doubling the number of available beds in the city to over 6,000.

Not even a 20 to 40 per cent drop in room prices across the board was enough to stop occupancy at some hotels from falling to a measly 10 per cent. That’s not enough to pull through into the comparative brightness of the summer season.

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An old dinosaur of the Vilnius accommodation scene, the ˇaliasis Tiltas, reopened as the Hotel Congress after swanky refurbishment last summer. But it quickly had to throw a colourful banner above the front door announcing price cuts of 35 per cent on all rooms. Soon the deal stooped to 40 per cent. The idea worked.

“The banner attracted a lot of walk-ins and we are slowly building contacts with agencies. We’ve been anxious about the long winter season. It’s certainly been a difficult start,” Rasa Desiukaitė, the hotel’s manager, said.
With the sheer number of rooms on offer in the capital, she is concerned that most hotels will have to pull prices down even further. The Congress is centrally located, but outside the capital’s Unesco-listed Old Town, one of Europe’s architectural treasures.

Life is a little easier for the Europa Imperial, the centrepiece in the Europa chain, a small, home-grown Lithuanian group of hotels that extends to Klaipėda and, later this year, Riga.

“Every tourist and businessman is interested in being in the safe, secure and visually fascinating Old Town, near all the key points of interest, bars and cafés,” said Martynas Kačiulis, the Europa chain’s general director. “And, strangely, this is also where very few new hotels are opening.”

Many of the new rooms in Vilnius have appeared just across the river in new, upmarket business and residential districts around the periphery of the centre.

“Here in the Old Town, there’s really just the Stikliai, the Narutis, the Radisson SAS Astorija, the Artis, the Mabre and us, plus a handful of very small hotels. The Artis recently tripled the number of its rooms to eighty, but still there’s very little competition.

“The Europa Imperial occupies a privileged location, in the Old Town, which is where people want to be,” Kačiulis continued.

But even that hasn’t prevented him from being forced to lower room prices at the Imperial by up to 50 per cent until the spring. In a wily piece of marketing aimed at long-stay corporate customers on generous expense accounts, the percentage discount gets bigger the longer you stay: 20 days wins a 20 per cent discount, 35 days gets 35 per cent off, and so on.

It’s often the cosy guesthouse with its friendly, individual service, such as the Grotthuss or the Grybo Namai, that many tourists want, whether they’re here for leisure or business.

The ten-room Grybo Namai has a staff of nine.

“We could do the job with fewer staff,” owner Stasė Grybienė explained. “But guests who were staying here eight or ten years ago keep coming back because of our personalised service.”

As a consequence, Grybo Namai has not seen a fall in occupancy, and the list of countries from which guests have journeyed – 76 at the last count – keeps rising.

Room Rush

The four-star chain Park Plaza Hotels Europe, which runs 23 hotels across the continent and is a London-based partner for US company Park Plaza Hotels & Resorts, part of Carlson Hotels Worldwide, expressed a wish in December to sign franchise agreements with existing hotels in Vilnius.
Evalda Šiškauskienė, president of the Lithuanian Association of Hotels and Restaurants, claims that there are at least four other offers on the table from big hotel chain names.

There are 324 hotels in Lithuania, of which 56 are in Vilnius. The only five-star hotel in the country – the Stikliai – is in the capital. But once hotels have completed a 17-page set of questions about their facilities that will lead to their being compulsorily classified, the number of five-star hotels is expected to rise. The deadline to submit that information falls in April.
The growing awareness that Vilnius has for too long been one of Europe’s great undiscovered cities has coincided with a rapid growth in the economy.

Alvitis Lukoševičius, director of the Lithuanian State Department for Tourism, said that the main factor behind the hotel boom is the economy.
“It’s no coincidence. The change in lifestyle since 1991 has attracted investment in the hospitality sector, but most especially it’s been the surge in the economy since the late 1990s slump. Now we’re almost in the EU and Nato and people are starting to recognise the name ‘Lithuania’.”
The Lithuanian travel trade has to ride the wave, he said, and get out there, promote the country, entice people here and get heads in hotel beds.

“It’s not been easy,” he admitted. “Turkey and Spain have no worries about attracting tourists. They have a well-established image. We, on the other hand, have had to prove we have a rich culture, beautiful countryside, friendly people and high-quality hospitality.

“In London recently we had to wait forty minutes for service in one hotel. That would never happen in Lithuania. But we have to prove it over and over again until the rest of the world listens.”

Lidija Lukšytė, the tourist board’s public relations director, tells a story that illustrates how addictive Vilnius can be. A middle-ranking Portuguese diplomat discovered Lithuania not long ago while visiting as part of a presidential delegation. He returned for a holiday and stayed for a month. Lukšytė found him at 4am one morning in a bar in good company and clearly having the time of his life.

Blast of Publicity

Hotels have also been energetic in their marketing activities. The Hotel Baltpark is the first in Lithuania to implement the Green Key, a Scandinavian ecological code for hotel staff that will attract environmentally aware clients in the Nordic region.

The two-star tourist-class Ecotel is deliberately targeting visiting dancers, actors, artists and writers – cultural figures travelling on a budget. The Hotel Conti, meanwhile, constantly bombards travel trade contacts with press releases and maintains a high profile.

“New hotels have to be especially active now,” Nijolė Beliukevičienė, director of tourism at Vilnius municipality, said.

“They are starting to communicate in a more professional way and promote the destination as well as themselves.”
Away from the capital, in Lithuania’s top coastal resort, the exclusive, recently reopened Hotel Palanga is visiting travel marts in Helsinki, Berlin, Moscow, Riga and Tallinn this year as well as Vivattur. But hotels still need all the help they can get.

Beliukevičienė hopes her tourism department budget will rise in 2004 to double the 2002 figure. It received 700,000 litas in 2002 and one million litas in 2003. She is asking young reformist mayor Artūras Zuokas for 1.4 million litas this year and believes she will get it.

“Zuokas understands the importance of tourism as a vibrant branch of the economy, that any amount of investment will pay back,” she said.

With this extra cash, the municipality plans to participate in 15 travel marts in key markets in 2004, creating its own stall as well as Vilnius posters, T-shirts, mouse mats and other eye-catching giveaways. All this visibility will help hotels boost their occupancy figures.

Everybody in the sector is working to attract tourists and fill beds. Šiškauskienė is full of new ideas and thinks that Lithuania should have its own catchy slogan and logo. The hotel association, which pools the capital’s hotels’ marketing resources to sell the destination, is also helping to film a video on Lithuania for either BBC World or CNN.

Beliukevičienė is optimistic that perseverance will get Lithuania recognised and save the nation’s hotels.
“More hotel chains are coming. A new Novotel will open on Gedimino Prospektas in March. This shows that even though capacity has doubled in the last year, it has not yet peaked.

“We need more visitors and we will get them. This year could be a hard one, but beyond that it won’t be an annual struggle for survival,” she said.


Conference Kick-Off

The conventional way to get customers through the hotel doors out of season is to attract groups of businesspeople to the caffeine-fuelled atmosphere of the conference centre. Lithuania so far lacks a coordinated convention bureau, but the travel trade is quickly picking up on the importance of having bigger and better meeting centres.

Conbaltas, for example, is a new company headed by a Danish national, established last year with the express purpose of selling the country as a conference destination.
Lithuania’s biggest hotel conference centres, the 1,500-seat complex at the Le Meridien Villon and the slightly smaller Reval Hotel Lietuva Conference Centre, both opened in 2003. Given the country’s rate of development, the future will inevitably bring the sort of mammoth venues seen in Western Europe that are capable of contending with events for up to 10,000 people.

Every medical condition, every scientific discipline and all the humanities have worldwide associations and organisations that purposefully scan the globe every year for their future conference venues. Lithuania is not yet capable of hosting such big events.

Or is it? If the competing conference halls located in Vilnius’ new, rapidly developing business centre on the right bank of the River Neris agreed to be co-hosts, it would give them a formidable chance of attracting these specialised conferences.

The Forum Palace, the Reval Hotel Lietuva and the Holiday Inn, Congress, Ecotel, Ad Astrum and the Šarūnas hotels are all within walking distance of each other, making them a possible single venue. Large conferences are usually broken down into sub-groups, which means that this “campus” of facilities on the right bank would be perfectly suitable.

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Akreta UAB
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