On February 20 and 21, Belgrade will host the seventh Adria Hotel Forum, the biggest international hotel investment conference in the region. For the first six years, the event was held in Zagreb, but this year, it is Belgrade that gets the opportunity to host some of the biggest world players when it comes to the hotel industry.
We talked to the organizer of the Adria Hotel Forum, Marina Franolic, about this year's conference, but also about the investment potentials of Belgrade, Serbia and the entire region.
eKapija: The Adria Hotel Forum is being held for the seventh time and for the first time in Belgrade. What will be in the focus of this year's conference?
– The topic of this year's conference is “Is the Future Bright?”, so we are future-oriented. In fact, we have always been future-oriented, but the topic is related to the constant announcements of a global crisis which awaits us in 2020, so we've decided to see what will happen and what we can truly expect. We will talk with financial institutions, investors, and the forum will also be attended by the EBRD's head economists. We want to hear what they expect in the future, as they have experts and analysts, perform constant preparations and surveys in order to see where and how to invest. That's why we're interested in what they have to say. On the second day of the forum, we will discuss hotel products, in which segments hotels are developing today, to which market they are turning and what kind of a product it is that should meet the needs of new tourists.
eKapija: Who will be the guests of this year's conference?
– I first want to emphasize that the EBRD is our strong partner and they will be present at this year's conference as well. Among others, we will host the head client request analyst of TripAdvisor, and there will also be representatives from Colliers International, with whom we have been cooperating for a long time now and who always provide us with new information in the segment of investments. Representatives of three large investment funds, The Morgan Stanley, Principal Real Estate Europe and KLS Capital, are also arriving to Belgrade. The director of development of lifestyle brands of AccorHotels Europe has also confirmed his attendance, and representatives of InterContinental Hotels Group will also be there.
When it comes to the region, there will be Delta Holding, MK Resort, Valamar Riviera, Arena Hospitality Group. Indeed, all the serious players in the regional and international market are arriving to Belgrade, which confirms that we are discussing very serious topics here. At the same time, they transfer their experience to us and present us with their plans, based on which small enterprises and hotels can also follow the global trends in this industry.
eKapija: The conference was held for six years in Zagreb? Why has it been moved to Belgrade?
– Our idea from the very start was for the conference to be moved around, to be regional in character. However, seven years ago, all this was a kind of a startup project that was yet to develop. We needed a lot of strength and time to bring all these big players to the conference, so it was much safer and simpler for us to stay in our yard. We have been thinking about moving the Adria Hotel Forum for some time, but we lacked courage to move from a comfortable place. Thank to the support of Zivorad Vasic, who convinced us that we should make this step, we decided to come to Belgrade. I can only thank him now, as I didn't question the validity of the decision at any point.
eKapija: When it was announced that the Adria Hotel Forum was being moved to Belgrade, it was speculated that hotel owners were disappointed with the investment climate in Croatia. Is that the real reason for the moving of the conference?
– That's something we've been asked often these days. Investors always go where they are the most sure that they will make a return on the investment, and they are still very interested in all the countries of our region. However, as for being greatly disappointed, it has to be said that we indeed are, because we believe that some changes that need to happen must happen much more quickly. But, honestly, this pertains to the whole region, not just Croatia, so I can't point a finger at anyone in particular. This moving, as I've already said, has been planned from the beginning. Belgrade was just the logical followup to Zagreb, as it is a strong city that can support the Adria Hotel Forum and where we can bring all these participants and have them be as interested as before.
eKapija: How have the Adria Hotel Forum partners reacted to the moving of the conference and what have the reactions been like in Serbia?
– All our partners with whom we have been cooperating for years and who are regular attendees at the forum have reacted very well. Some of our partners from Croatia, such as the banks which operate individually in each country, could not follow us. However, when it comes to international participants and global hotel brands, they are delighted about this. They see the entire region as a very interesting market, so it's not too important to them whether the conference is held in Belgrade, Zagreb or Ljubljana.
Belgrade has given us a great welcome and, as I said, at no point did we regret that we are here now. I have met big hotel owners from Serbia before, since they took part in the Adria Hotel Forum while it was held in Zagreb. All of them reacted very well when they learned that we are coming to Belgrade, as did the Chamber of Commerce of Serbia, the Investors Association, the Business Association of Hotel and Restaurant Industry (HORES), the media...
eKapija: How interested are investors in investing in Serbia and the region when it comes to tourism?
– Foreign investors are very interested in investing, but it should be noted that they are interested only in a certain number of hotel products. To clarify, they would never invest in a greenfield project and are more oriented towards brownfield locations, that is, existing facilities they might reconstruct and potentially re-position in the market. American investment funds which have offices and make investments everywhere in the world are the most frequent visitors to our region. They always set a period in which they expect to make a return on the investment. That's why they rarely decide to invest in the raising of new facilities, choosing to rebuild existing ones instead.
On the other hand, investors from other countries, China, for example, of which there are increasingly more these days, are interested in all kinds of project, that is, they are more ready to invest in existing and entirely new facilities alike. All in all, there is a wide offer in the region and it is important for the products that investors are interested in to be adapted to the market and to have a tendency of growth. Otherwise, no one can be too satisfied.
eKapija: How do you rate the investment climate in Serbia? What do hotel owners and investors that you have contact with think about this?
– In the past years, Belgrade has been growing and the number of hotels being opened is fantastic. Unlike Zagreb, where very few facilities are being opened, the market here is growing continuously, so investors see an interest here. It's important for the number of tourists to be matched by the development of hotel products. So, there are investors and they are interested. If I'm not wrong, the plan is for additional capacities to open in Belgrade in two to three years. Once that happens, with this market growth rate, the number of opened hotels will match that growth. If you also solve the problem with the congress part, you will definitely need more accommodation capacities.
In Zagreb, for example, hotels are currently opening, but we still lack capacities. There's room for several more facilities. It's the same as in Belgrade. If a congress center opens, we will have a problem, lacking new hotels and investments. However, if this doesn't happen, the growth will be much slower.
eKapija: Does this mean that our future lies in congress tourism and is that a segment we should pay more attention to?
– In capitals, certainly, and I believe that the focus should be placed on the development of congress tourism. It is a fast growing segment, that is, it can develop very fast. While the so-called vacation tourism, which grows on an individual level, can be very deceptive, in the sense that a destination can have fantastic results one year and then drop the next year, congress tourism can develop much more quickly and have a large volume. I definitely believe that this is a segment that needs to be focused on more in the future.
eKapija: What are the main assets of Belgrade when it comes to the development of tourism?
– When someone mentions Belgrade in Zagreb, everyone talks about weekends and parties, and as for the business, a large number of companies are headquartered in Belgrade. Once Belgrade synchronizes its business and vacations segments and adds congress tourism to it, it will have results that will be envied by all.
eKapija: In the past few years, spa and mountain tourism segments have been developing in Serbia. Is there a chance for growth in these segments?
– Belgrade needs to make the first step and we can then expect other destinations to develop. Zlatibor is another important location, and Serbia also has spas in which capital increases and additional investments need to be made in order for them to develop into a serious product. It will certainly complement the tourist offer of Belgrade. Also, once the highway is completed, it will all be better connected.
eKapija: What do you expect from this year's Adria Hotel Forum?
– First of all, I expect for us to see what will happen in the future or to at least be told by economists and investors what their expectations are. I believe that it is very important to hear what they think and what they have to say. Also, it's important to think about the future on time, in order for us to be able to react on time if a crisis comes along. I believe that this is crucial.
The next thing, of course, is to see what we have to do to additionally attract investors. They are here now because there's a lot of capital in the market. This means that the capital is cheap and that there is money for investments. In the case of a crisis, the capital will become more expensive, that is, there will not be as many investments in the less secure markets, which will directly affect us. That's why it's important for us to find a way to be as present and as interesting to investors as possible.
eKapija: How much capital do the investors that will attend the conference have at their disposal?
– Last year in Zagreb, there were investors with around USD 500 billion worth of real estate and investments at their disposal. It's the same this year and those are truly enormous amounts. They do have capital, it's only the question whether we will attract them and make them feel secure investing in our country and how. Because, regardless of how big they are, no investor wants to lose money. That's why we're here and we want to make sure that the investments are as safe as possible. Once it all starts, the arrival of the big players will attract smaller ones.
eKapija: What are the plans for the upcoming period? Will the Adria Hotel Forum be held in Belgrade next year as well, or are you planning another destination?
– I believe that we will stay a while in Belgrade. We will not change the location every year, as that it would make it much more demanding, and we are placing the focus on the program and the panelists. After this year's forum, there will be another conference this autumn. This will not be an investment conference. Instead, it will be dedicated to hotel operations. It will be called the Hotel Operations Weekend and it will most probably be held in Porec. We believe that it too is very important, as, once you build a hotel, the operations are what make the existing guests stay and new ones arrive. Our aim, therefore, is to present some global trends in order to show hotel owners in the region what is being done in the world and how and to have them implement it here.