We believe in Ukraine, that is why we are opening a hotel under our most promising brand - Tulip Hotels & Residences - here in Lviv, as part of the multi-functional office-hotel Complex Kristal Plaza.
A conscious decision to expand into Ukraine was made at the end of 2022, this is our support to Ukrainian hotel developers and to the hospitality industry market of Ukraine on the whole. Being an integral component of the Complex – the Apart-Hotel with 73 rooms is located on the 2nd to 8th floors. The developer of the project is the Galician Building Guild (GBG). The building was signed-off (permission) into operation already during the war, in April 2023, currently the rooms are at the stage of fit-out & furnishing and the property is planned for opening at the end of spring 2024.
Louvre Hotels Group has been developing since 1976 and unites more than 1,720 hotels with a room stock of over 150,000 keys in 54 countries. We have a full range of hotel brands - from 1 to 5 stars according to internationally accepted norms: Royal Tulip (5*), Golden Tulip (4*), Campanile (3+*), Tulip Hotels & Residences (3* hotel rooms & extended-stay apartments), Kyriad and Kyriad Direct (3* & 2* respectively) and Première Classe (1-2* level); five brands of the Sarovar chain in India; , as well as soft brands Hôtels & Préférence Group and TemptingPlaces for exclusive and boutique hotels.
In Europe, we are #2 in the number of hotels. Ukraine becomes the 55th state where we will be represented, and we offer the most modern, most flexible format of cooperation with most of our brands.
Ukrainian hotels joining our network will join our two very advanced systems – of reservation and of guest loyalty. This will help to ensure higher occupancy rates and average daily rates to hotels, and thus adds liquidity value to such investment projects. I am rushing ahead a bit, but the integration of these systems with Radisson's into the combined global client base of two sister companies - Louvre Hotels Group and Radisson Hotels - has already begun, and will be complete by 2025. This is a super-powerful move within our competitive hotel industry worldwide!
Why was this particular brand chosen as the start-up in Ukraine, what is its special feature?
We call Tulip Hotel & Residences a mega-brand. This means that in the next five years it will be the flagship of our development. It is one of the brands that will be offered to investors and consumers in the first place, and a significant part of the marketing budget will be directed to its promotion.
The concept of the brand is reflected in its name - Tulip Hotel & Residences. There can actually be two products under one roof - classic hotel rooms (i.e., Tulip Hotel) for short 1-3 night-visits, as well as larger in size & with a kitchen annex Tulip Residences suitable for mid-terms and extended stays, and that is the option chosen for Lviv.
How many Tulip Residences are currently on the market?
Since 2021, two hotels under this name have opened - one in Paris, the other one in Warsaw. One more is preparing for opening in Massy-Palaiseau (France) in February 2024. Tulip Inn Zyrardow opened in 2023, will be rebranded to Tulip Hotel & Residences.
That is, the Lviv one, planned for opening later in 2024, would become the fifth?
Not at all. As of now 26 hotel projects of this brand at a stage similar to the one in Lviv (structure erected, engineering equipment and furnishing in progress). We plan to open in 2024 two more, in Wroclaw and already the second one in Warsaw.
Are you negotiating for other locations in Ukraine, maybe offering other brands?
Yes, we certainly are, even though we just started activity here. At the moment, we are in talks with one developer re Tulip Residences, also one investor wants a Golden Tulip in another city. These are very substantive negotiations; however the agreements have not yet been sealed with signatures.
What cities are you interested in?
There is keen interest in Kyiv, Lviv and Bukovel, we are in talks over specific locations/objects, but they have not yet been signed. Odesa is also likely, and Ivano-Frankivsk. It all depends on the investor, how confident he is today to invest in creation of a professional hotel object. If he dares to join the network and make appropriate modifications to the fire and safety systems, then we are ready to cooperate.
What are the terms of your hotel franchise?
Today, LGH has one of the most competitive offers on the market: although negotiations can still make significant adjustments (the size of the hotel, its location, the speed of the developer – those matter a lot), negotiations always start from 6% of the rooms revenue, excluding restaurant & other rent revenues. Often in the "pre-war era" in Ukraine, our competition advertised 5%, even 4% of rooms revenue, but I would advise that those developers, interested in cooperation with international brands, read the "small print" carefully. There are specialized consultants for this, and we strongly encourage clients to hire such consultants - negotiations then proceed many times more efficiently, this increases level of "specialized self-education" of local hotel developers increases.
And what are the royalty payments then?
It is difficult to say with detalization: as I said - a lot depends on the deal with a specific investor on his specific case. For example, if he comes and says - I have two hotels with 150 rooms that I’d like to put your flags on them, then he should certainly get better terms than the one who has one small one with 60 keys, right?
This format of the hotel, where we are now, in Lviv, is designed for a new understanding of tourism, including for "nomads" who work from other cities for several months in a row. What special options are designed with their wishes in mind?
This product adapts to new types of clientele that do not have a permanent place of residence in any country and can move from country to country.
We are one of the international companies specializing in residences (apart-hotels). Guests staying for longer periods should have a kitchenette. They need more space for clothes and other things, an additional sleeping place (i.e., a comfortable sofa bed). They should be able to wash and dry their own clothes (washing & drying machine). And they really like co-working, sometimes there is a small library, there is an area where you can hold small not-loud get-togethers.
So, in the "residences" property there are places where the "residents" can meet, cooperate, eat together, host the other guests without having to take them upstairs to their room.
Louvre is constantly in R&D, we test new products, hotel elements, bedroom & apartment formats, i.e. a new “brilliant basic” program of standards is being implemented globally as of 2024, which will increase strongly the comfort of the guest’s bathroom & bedroom.
What options encourage a healthy active lifestyle?
There is also a fitness room. Another option is bicycles, in those hotels that have the opportunity to offer a safe bicycle route. We have two types. There are bicycles for leisure, for example, bicycles for families with kids. And for those who go to work.
By what criteria do you choose which of the brands are more adequate for cities?
There is no dependence on the city, there is dependence on the location. By definition, we carry out an analysis while paying a visit to the location of that future object, look it up from the technical and architectural viewpoint, and only after that we make an offer to the investor regarding the format that is optimal in that specific case and place (well, or we justifiably refuse). We analyze the traffic of possible guests, various sources of demand. For example, in other countries we have more questions about the nearby offices, hotels, shopping centers. Depending on the guests' needs, the hotel can even be at a gas station or at major intersections, but it is closer to our economy products, i.e. Première Classe. By the way, I am convinced that this particular brand would very successfully enter the Ukrainian market, where the purchasing power of citizens will be somewhat reduced in the coming years.
Today, there are no standard solutions, everything is highly personalized. Guests want personalized service, investors want personalized service. All brands and hotel investments depend on how the world changes. We have to be flexible, analyze the place and then mix, decide which of the brands in which mix can best suit this or that location and investor’s profile.
You are not scared off by the current situation in Ukraine?
As I mentioned above, it is a bold & noble decision at the level of the board of directors to actively enter the Ukrainian market. However, without strong local partners, it is unrealistic to achieve specific hotel openings here. A strong developer (Oleksandr Kryshtofor, Galician Building Guild), a young yet professional Ukrainian management company Burford Management (Ivan Loun), and industry "accompaniment" by Ukrainian Hotel & Resort Association UHRA (Iryna Sidletska) – with those partners any project risks are reduced to the minimum.
With the participation of CFI, Agence française de développement médias, as part of the Hub Bucharest Project with the support of the French Ministry of Foreign Affairs.
