„We cannot predict how long the virus will be around without a vaccine or proper cure, but tourism is possible if we follow the given hygiene recommendations and maintain social distancing“
Mr. Franz Lanschützer (Deputy Chairman of the Supervisory Board of Valamar hotels) in an exclusive interview with mrp hotels. We have summarized the main findings and detailed insights of this exchange as the following. Please find the long version of the interview by following the link.
The Valamar hotel group operates 36 hotels and 25 camping resorts in mainly Croatia and in Austria. In 2019 the company finished the year with almost 300 Mio € revenue and about 100 Mio € profit.
Of course, as Croatia being an important holiday destination for Europeans, the company was hardly affected when the borders of the EU closed on March 18th, when holiday season is slowly starting to speed up. At this time, instead of preparing for the main season, operations were closed, and focus was put on strategic action plans maintaining liquidity and employment. Policies and mechanisms of negotiated deferred payment for 6 to 12 months concerning other stakeholders were introduced including sales partners, suppliers and banks. It also helped that dividend payment for 2019 was revoked and members of the Supervisory Board waived payment.
Valamar managed to successfully pause its business, protect jobs and prepare for the restart of the tourist season. Croatia has a good plan for the phased opening of the summer tourist season focusing on leading source markets while using its advantage of being an automobile-destination.
Valamar started opening its camping resorts in May and continued with the opening of its hotels and resorts throughout June concurrently with the opening of borders and the normalization of travel from leading source markets.
As it is said that the pandemic might follow us for years Valamar has modified its products and accelerated the development of digitilization project to adapt and improve. Accommodation capacities of hotels, resorts and camps were reduced to give more space to the guests. The key innovations implemented at the opening of properties are, „V Health & Safety“, a program for the safety of guests, „CleanSpace 100% privacy“, an enhanced system for cleaning rooms and mobile homes, “Valfresco Direkt”, an online shopping and food delivery service, „Online reception“, for making a “touch less” check in and concierge possible and „Bed & Brunch“, as a new food concept.
However, though investments in improving operations at the hotel sites and cost efficiency went down, there is little opportunity for yielding upwards like in the last years, but rates are supposed to stay more or less the same as last year. For the hotel company it is hared to look beyond September as the situation is so dynamic and ever-changing. Right now, the premium properties are running at 90%+ of reduced capacity, which is actually more than initially expected. Hopefully 2021 will be back to normal and budget is set accordingly. However, right now according to the fast changing situation and the high presence of media influencing occupancy, it is not quite clear how the bottom line will look like at the end of the year and what higher costs, less efficiency and higher additional costs will actually mean for the final “Profit and Loss” statement.
To increase pick-up for this summer and next year Valamar has increased booking flexibility including short term change of reservation. Assuming the epidemiological situation stays stable and public and private sectors cooperate well, Croatia summer season should see up to 50% of volume compared to 2019. Our best performing properties are campings, mainly the invested premium properties there.
“We cannot predict how long the virus will be around without a vaccine or proper cure, but tourism is possible in these times if we follow the given hygiene recommendations and maintain social distancing. Our summer leisure products are mainly outdoor, reducing the risk of infection to a minimum with proper precautions”, states Mr Lanschuetzer.Franz_Lanschuetzer_-mrp-interview_LZ-1