The Czech hotel chain Orea grew by a third in sales last year and the result was mainly driven by resorts. But after Russia’s invasion of Ukraine, even the baths have “woken up”. However, the traditional Russian tourists were replaced by Czechs.
Domestic spa towns have traditionally lived off Russian tourists for many years. After Russia invaded Ukraine, however, it logically lost this clientele. However, the Czech Orea chain, owned by Petr Lukes’ Cimex group, which operates a total of 20 hotels, caught its second wind in the spa last year. Surprisingly thanks to the Czech guests.
“For example, the Marianas are starting to grow. The spa market in the Czech Republic was greatly affected by the Russian invasion of Ukraine, the Russian market was closed to Karlovy Vary, but now it is starting to get back to normal,” said Gorjan Lazarov, CEO of Orea Hotels & Resorts, in an interview with SZ Byznys.
This was helped by the domestic and German clientele that filled the holes left by those from Russia. “In 2019, Czechs accounted for a third of our clients, another third were guests from neighbouring countries and a third were others. Today, two-thirds of our guests are Czech,” Lazarov calculates.
In addition to spa hotels, the chain operates hotels in Prague, Brno, Šumava, Špindlerův Mlýn and Harrachov. Last year it accommodated a total of 1.1 million guests. Lazarov describes it as “successful and record-breaking”. “Our revenues were 30% higher than in 2022. I think that this year we will surpass the amount of two billion crowns,” Gorjan Lazarov specified the results in an interview with SZ Byznys.
And even though the Czech Republic experienced weaker economic growth last year and people saved money, Orea Hotels & Resorts’ sales were 60% higher than before the covid. But at the time, the network was in the middle of a massive reconstruction. “We have invested a billion crowns in our hotels in 2019 and early 2020, we have been stopped by covid, which means our numbers are some 60% above the pre-covid numbers,” Lazarov said.
I also respond to complaints personally, says the director
Lazarov attributes the good economic results to the transformation of the customer culture. He measures client satisfaction based on ratings on his website and, most importantly, on the international Booking.com platform. “The result on Booking.com went up from 7.4 in 2016 to 9.4 last year.” (The rating has an overall ten-point scale, note. ed.)
If a client complains, it is most often about the condition of the hotel’s facilities. “We have hotels that are built in the 80s. years. Most of them have been renovated,” says Lazarov, who sometimes responds to client complaints in person. “We respond to feedback and analyse it very carefully. We try to eliminate all “pain points”, as we call them internally. Clients are surprised that I answer in person.”
Accommodation prices depend on the type of hotel and the season; last year they rose by an average of one tenth. This year, they will also be affected by higher VAT, which rose from 10% to 12% for accommodation services in January.
Still, Lazarov said the summer season will be strong. “If I take January and February, we have a 20 percent increase compared to previous years. I think that trend should continue, and I personally expect a strong summer season.”
- Hotels under the Orea brand belong to the Cimex Group. However, this year Orea plans to take over the operation of other hotels that the investment group does not own. So he looks around at owners who got into financial trouble during the covid and at resorts. “Some negotiations will be concluded this year, but I can’t be specific because it’s before the signing,” Lazarov said.
Also on the table is the expansion of the brand abroad, specifically to neighbouring countries or Croatia.
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