Before the outbreak of the pandemic, Prague was not only a popular tourist destination, but also a venue for congresses and conferences of all kinds. This type of event is also crucial for the sustainability of the hotel segment. After two years of covid downturn, the domestic hotel industry now seems to have started to recover. This is also confirmed by the Czech hotel brand Orea, which reports that it has grown by 25 percent in sales volumes compared to the last “normal” year in 2019.
“We have renovated a large conference space in Prague’s Pyramida, which now houses a hall with a capacity of 500 people. Overall, they are much more modern and adapted for conferences with exhibitions. The Congress Hotel in Brno has undergone a complete reconstruction of the first two floors. Thanks to this, we have managed to get the business off to a great start after a period of covide,” says Lucie Gajdošová, who is responsible for business clients in the sales department of the Orea chain.
Total investments during the covida pandemic amounted to hundreds of millions of crowns. It was a continuous investment not only in renovations but also in employees. Gajdošová mentions that a new marketing strategy focused on strengthening the brand and its online environment has also helped. As a result, guests have started to book accommodation directly through the Orea website to a much greater extent, instead of using the websites of intermediaries to whom hotels have to pay commissions. The number of direct bookings has doubled compared to 2019.
“Direct selling has also been helped by people becoming more accustomed to using the internet during the pandemic. They learned to work with other channels, they started to compare different offers more. So now we are skipping the middlemen and being more efficient in sales. We are still investing heavily in promotion and strengthening in the online segment,” says Gajdošová, adding that the network as a whole grew by 25 percent last year compared to 2019.
New travel habits
Last year also saw a fundamental change in the composition of the clientele and the Czech clientele began to dominate. When the borders were closed, the Czechs found out that it was possible to travel domestically. And thanks to the fact that the Orea network has its hotels located not only in big cities such as Prague, Brno or Olomouc, but also in popular holiday locations, Czech clients have started to book multiple stays within the network during one year – for example in Sumava, the Krkonoše Mountains, South Moravia or the Highlands.
“The way Czech clients travel has changed. They don’t go on as long vacations now as they did before the pandemic. Prior to 2020, stays had an average length of five nights, but now they have been reduced to three nights. But people travel more than once a year. Foreign clientele is returning, but only very slowly and gradually,” Gajdošová adds to the transformation.
The reason for the slow return of guests from abroad, whether they are on holiday or on so-called “business”, is obvious. Prague is now much more inaccessible by air than it was in pre-pandemic times. There are fewer direct flights, and tickets tend to be more expensive. This may not be so crucial for individuals, but for companies looking to plan conferences or other larger events in the Czech Republic, it can be a major hit to the budget.
According to Gajdošová, a few years ago, airfare accounted for approximately 25 percent of the cost of a conference or congress. Now they swallow up to 50 percent. The number of foreign guests has thus decreased and changed significantly. Previously, the Orea network had a higher proportion of non-EU clients, but now more Italians, Spaniards, Germans and Austrians are coming to the Czech Republic. They used to be a great rarity, but now they seem to have discovered the charm of land transport and choose trains instead of planes.
As far as the tourist clientele is concerned, they accounted for two thirds of all guests in the Orea network last year. The rest was business clientele, which, according to Gajdošová, played a big role in the hotels in Prague and Brno – these are most often used for business trips, but also for conferences and congresses, thanks to which the hotel chain had a successful autumn season. As far as recreational locations are concerned, the companies used them last year mainly for team building, which included a walk with a llama in Šumava. There were also themed buffets or banquets in the company colours.
“Just as the behaviour of tourists has changed, so too has the attitude of business clients. The time between the request for accommodation, or even conference space, and the date of the event has been significantly reduced. We used to do conferences for five hundred to a thousand people two years in advance. Congresses for five thousand people and five years. Now similar actions are dealt with within half a year, the decision-making time is suddenly much shorter,” explains Gajdošová.
Companies have become accustomed to the risk of having to improvise more if they can’t find space. At the same time, event managers lived for two whole years in the mindset that planning big events was the equivalent of a lottery – they never knew if regulations would come that would force them to cancel the event. So now that the company has the budget to host a larger conference, it wants to make it happen as quickly as possible. ” One recent example – we were given a brief and we set up an event for 60 people the next day,” says Gajdošová.
“We have jumped on the digital bandwagon and are adapting to our clients as much as possible. We are more flexible, faster and have a new solution for digital processing of offers and requests, in which the client can adjust the parameters himself. We are also adapting the offer of other inputs, such as food and beverages, as clients are now trying to save more on these at the expense of the aforementioned expensive tickets,” adds Gajdošová.
Further investments and acquisitions
Now the Czech network Orea wants to focus more on foreign business clients. They can make a significant contribution to further growth in brand turnover. It relies on having 20 hotels in desirable locations, while the client can communicate with only one person and receive offers in several locations spread across the Czech Republic. In addition, the most desirable conference hotels can be viewed online with a 3D virtual tour. Gajdošová mentions that the event business today cannot do without something like this due to the rising travel costs.
Investments within the Orea network will continue in the coming year. They will be directed mainly into further renovations and will also focus on expanding the wellness areas within the larger resorts. New hotel acquisitions are also planned, similar to the one that took place at the end of last year – in December, the Panorama Resort Blansko by hotelier Ivo Lachman became part of the brand’s portfolio. Orea entered the resort in the form of a lease agreement, which means that the hotel still belongs to the original owner, but the chain is in charge of the complete operation and has given the property a new name, Orea Resort Panorama Moravský kras.
“The acquisition was not risky in any way, nor was it a step into the unknown for us. We knew that this concept works very well for us, for example the Nine Rocks resort in the Highlands is very popular. We want to run the hotel all year round – in the summer season, families with children or couples can come to the hotel, and in the off-season, business clients can come. We already have a lot of enquiries, and we opened in February. In the future, we will be looking to add more hotels through similar acquisitions. Some are now in the negotiation phase,” concludes Gajdošová.
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