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Earlier a company had to book a time slot and space a year in advance. Today, there is plenty of available space, says President of the Natsionalniy Business Center Serhiy Hradyl.
Executive Director of Key Communications Natalya Mchedlishvili says today the business conference market is down 50-60% compared to last year. Oddly enough, this bust on the market is good for potential customers.
The fact is that fees for such conferences remain unchanged. Meanwhile, in hryvnia they have even increased by 40-50%. For example, last year rent for section A in the President Hotel was UAH 400. Today it is UAH 600.
Despite this, players on this market admit that the increase only affected the rates oriented towards . “Everyone tries to meet one another half way, though every company has its own pricing policy,” says Mchedlishvili
As such, hoteliers that have mastered the new rules of the game are more inclined to make concessions than novices on the market. Quite often they add new services at the old rate or simply do not require a 100% pre-payment.
Hotel Opera took another route by developing several conference packages that include service, banquets and technical support in the rental of a room. In other words, customers can choose a package that optimally suits their needs without wasting time studying a menu, rental terms, etc.
“There is a special conference package for the entire day offering two coffee breaks, lunch and rent or a two-day package that includes accommodation… The bonus is that guests can request changes to their package at will,” says Iryna Sergeyeva, PR Manager of the Hotel Opera.
The main expenses in organizing a conference go to rental of space, handout materials, advertising events and buffets with coffee breaks. Mchedlishvili says there are many nuances in price setting, for example, the frequency of orders placed with hotels. Indeed, hotel management offers wholesale and regular customers a decent price break.
Hradyl conditionally divides hotel operators offering conference space for rent into those that work on a one-time basis and those that earn money on steady turnover.
He prefers to work with the second category adhering to the notion “the more the participants, the lower the cost of one and the longer the term of rent, the lower the rate per hour.
Market players admit that a 10-15% discount is the norm. The exception to this norm is a conference of which one of the sponsors is a hotel. In this case, there are grounds for asking for higher discounts than usual.
If budgets are limited, experts in this business advise potential customers to check out hotels in cheaper districts, where rooms may offer the same level of technical specifications, but are 25-40% cheaper than hotels in the downtown area. Around 7% of the budget can be saved if the right equipment is chosen. The fact is that hotel operators try to outfit their conference rooms with the most state-of-the-art technical equipment to maintain their positive image. Quite often the catch is that the more sophisticated the equipment, the higher is the probability that a customer will have to hire some technical expert. This is why it is smarter and cheaper to choose more basic equipment.
Easy on the pocket
Accommodation of conference participants is often a headache for organizers. One would think it would be easier to stay overnight in the hotel in which the conference is being held. Moreover, these days hotel management places every effort into customer satisfaction by developing special loyalty programs and lowering officially set prices by 30-35%.
Besides that, practically all hotels have tried to improve their level of service. Nowadays breakfast or lunch, use of a swimming pool and free Internet access are included in the price of accommodation and hotel management is even prepared to offer additional discounts.
Nevertheless, conference participants prefer to stay in a hotel where they feel comfortable. “Foreign guest speakers rarely stay in the same hotel. Some prefer to stay in a hotel, some prefer an apartment and others will settle for some other form of accommodation,” says Mchedlishvili.
Furthermore, despite the efforts of hotel management in the majority of cases service does not correspond to prices. This trend can be observed in the segment of middle class hotels.
According to the statistics of Horwarth Consulting Ukraine, only 3% of the hotels in Kyiv comply with international standards. This is precisely why private apartments being let for 20-30% lower are an attractive alternative.
For example, a room in Premier Palace goes for around EUR 305-505, not taking into account suites on the diplomatic floor that go for EUR 365 up to as high as EUR 3,030.
In comparison, the price of an apartment in the Senator Apartments varies from EUR 130 to 600, though the square area is larger. “Apartments are rented for a medium- or long-term period and the longer a person stays in them, the lower the price,” says Maryna Rymarenko, Marketing Director of DEOL Partners, a company that manages the Senator Apartments chain.
The cheapest option is renting an apartment that is three-four times cheaper than a hotel room. For example, a one-room apartment on Maidan Nezalezhnosti (Independence Square) in Kyiv can be rented for US $70 a day. The rent of an apartment depends on its condition, whether it is equipped with home appliances and its location and the price can fluctuate between 40-50% in the luxury segment. The advantage of this option is the wide selection, though the quality of most apartments offered for rent is questionable.
In such cases companies that are engaged in renting out apartments on a daily basis can offer assistance to conference organizers. Moreover, today they not only offer intermediary services, but also meals, transportation, housekeeping and laundry services.