Interview with the founder of Hotel Business Forum (Moscow, Russia) Alexey Volov about entrepreneurs in the hotel business, difference between hotel chains and independent hotels, and competitive advantages in the hospitality industry.
TOHOLOGY: The concept of the first Hotel Business Forum was based on the difficulties that Russian independent hotels were faced with. In one of your last year interviews, you referred to HBF as an international event. What awaits us at the anniversary forum? Will the geography of its participants continue to expand?
Alexey Volov: It has no other option but to expand! We are expanding in all directions. Last year, the geography of participants grew to include Bulgaria, the Czech Republic and Poland, which means that we have transcended the CIS borders. In addition, this year some of our information partners are going to publish HBF-related materials in English. Your editorial is no exception. This year, our geography has already reached the customary extent. As to the rest of the geographical data, we are going to release it at the forum opening ceremony. Speaking about the anniversary meeting, our participants can look forward to:
- Themed opening and closing ceremonies.
- Large-scale networking.
- “Hot final” of the national competition with 12 winners in the PechaKucha format.
- New names in the industry and success stories: Vladimir Sedov, the founder of the Askona company and the Dobrograd resort city; Evgeny Kolotilov, business coach in sales; Alexey Kislov, Anton Alexeev, Roman Bunyakov and Elena Sukhinina, F&B experts; Felix Shpilman, Ostrovok.ru CEO; Tatiana Shcherban, HR and business coach; Elena Magnenan, the proprietor of Ples Hill (“Private Visit”, Russian-French hotel and restaurant in Ples (Plyos). – editor's note), and so on.
- Hotline – our daring attempt to organize an all-Russian dialogue between hoteliers and authorities and broadcast it online.
We have used our all-out efforts to prepare the programme. We undertook a great study, came in contact with hundreds of hoteliers throughout the country and created rich content that reflects a number of pressing problems in the modern hotel business.
TOHOLOGY: As you know the scoop of the main competitive advantages of hotel chains, could you tell us the strengths of independent hotels? What should you bet on if you are not a part of the corporation?
Alexey Volov: Of course, being independent means that you have your own points of growth, such as an advantage in lower costs, and therefore, lower prices. Being free of chain standards, you have more opportunities for creativity from the very start. Though some people may take it as heresy, I count the possibility for the owner to take part in the hotel life and development to be among the weighty and undeniable advantages. The owner might discover tons of communications and underestimated opportunities and become the inspiration and often the soul of an independent hotel. There is often no soul in chain hotels. Although this is not always the case!
TOHOLOGY: I take it that you are of the opinion that it is advisable for the owner of the business to take part in the management of the hotel? Many hotel managers will probably argue, referring to the established order, where the owner does the owning and the manager – the managing.
Alexey Volov: To prove my point, I will give you a couple of names of modern hotel owners who have bright personalities and bring their soul into the business: Yunis Teimurkhanli, CEO of SwissCenter Group, which includes the Helvetia hotel in St. Petersburg. It is Yunis's main business and pet project, where he can meet and accompany guests, give them original gastronomic gifts, or devote time to business dinners to promote further development. There's also Elena Magnenan, the owner of the “delicious Ples Hill” (Pleskaya Gora in the Ivanovo Region), whose skill as a restaurateur or hotelier cannot be fully transferred to a manager, since guests expect her to be involved in the service atmosphere, which creates a WOW effect. If you take the time to study the success stories of our abovementioned colleagues and look at guest reviews, you will see, that without them as owners, the facility would not be perceived the way it is and would never have become a point of attraction. This is a solid advantage, when an active owner is on board. Though, this is not for everyone, for this is not always scalable. This is a special atmosphere that does not always exist within the walls of a chain hotel.
TOHOLOGY: When I was doing a PhD, I was frequently asked about my reasons, as I mostly worked in business. Since you also have a degree, how much did it affect your hotelier career? Was it important for working in the hospitality industry in general?
Alexey Volov: I would say that the presentation of my thesis came in as a very important and handy experience. It was a matter of principle for business in those days. It gave me the skill of structuring my knowledge, and it keeps helping me to follow trends and to direct my future where I want it to go.
TOHOLOGY: Let's talk about positioning. Specialization helps a hotel to gain a foothold in the market. What are the current global trends? What do investors mostly focus on: the congress sphere, apartment hotels or any other type of accommodation? Are these trends applicable to Russia?
Alexey Volov: These are very good questions, yet, as far as I know, no one has done this kind of research. Let's save these two questions for the hotline between the government and hoteliers, shall we?
TOHOLOGY: TOHOLOGY subscribers include not only hospitality industry professionals but also travelling businesspersons. Considering the more realistic options for launching accommodation facilities in the range of “hostels – hotels up to 50 rooms”, could you offer a couple of tips for starting such a business? Is it worth going into this niche at all, if you are a new entrant?
Alexey Volov: First of all, I would like to understand what you mean by a “travelling businessperson”? Someone who travels, works as a freelancer and prefers hostels? In terms of launching a hostel, my recommendations here will be the same as for launching any other business, the top 3 being:
- Proper planning.
- Create a team and distribute resources.
- Be systemic in your work, otherwise your hostel will not survive through the first year. You need to constantly look into your business and search for new ways of development. This is the only way.
TOHOLOGY: Let me specify the target group. Entrepreneurs, who travel a lot, become inspired by the hotel industry during endless business trips and therefore show interest in the hotel business. Still, can you say that the risks of entering the hotel industry are very high if you have the necessary capital?
Alexey Volov: You have to understand that the hospitality business is always a high risk in my understanding, whether it is a hostel or an independent bed-and-breakfast. It all starts with a team and the need to invest not only material resources in your facility, but also your personal time and energy, if the CEO undertakes to do the business: either you are in the business yourself or you are paying someone, who is behind this development. Perhaps, it is better to consider the model of partnership, clarify the benefits and contributions of the parties... Every case is actually individual.
TOHOLOGY: Which is the better option: to launch a hotel in high season according to the planned schedule, but with partially unfinished redecorations, or to wait for the works to be finished and lose the additional revenue?
Alexey Volov: There is not enough information to answer this question. Which works are not completed? How will this affect the comfort of guests? Is it possible to accommodate guests on floors without any shortcomings? How is it connected with the safety and comfort of guests? There are too many questions.
TOHOLOGY: Let's suppose that the hotel has 100 rooms, 40 of which have unpainted walls and no furniture. These unfinished rooms are scattered randomly on all the floors of the hotel. Will you admit guests into the 60 finished rooms, taking into account that other hotel facilities are ready?
Alexey Volov: I would not take such a risk and would finish the decoration as planned. If the hotel opens early, it will be in the soft mode. So what kind of response will it receive from guests? How will it affect its reputation? With these two simple questions, you immediately begin to think differently and no longer wish to start your business with scandals due to various flaws.
TOHOLOGY: If we were to compare Hotel Business Forum with a car, what should we be driving this year?
Alexey Volov: The first thing that springs to my mind is a cabriolet, and I'll explain why. The cabriolet has always been bought as the second car. Something that is entertaining, fashionable and proving your high status. So, to create a bold HBF metaphor, we are obviously an atmospheric and already trendy platform, though we are still competing for a place in the hoteliers' schedule: they may not know of us or may not know how to reach us. We are working on it. Besides, when a hotelier is deciding in which one of the several events to participate, they consider the question, like a buyer of the second or the third car. Here, it is often about being practical. HBF with its high concentration of content, bold themes, top speakers and value options for your ticket rate is clearly becoming both a favourite and a practical purchase.
Thank you for your time and interesting questions. See you and your readers at the HBF anniversary in Moscow on November 8–9!
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