Corporate crunch

Swissôtel The Bosphorus, Istanbul general manager and regional vice president Turkey and Eastern Europe Gerhard Struger explains why the city’s convention market will suffer even more next year

Can you sum up the Swissôtel Hotels & Resorts brand standards?

It is a very deluxe hotel company, hotels typically have somewhere in the region of 250 to 300 rooms, meeting facilities, restaurants. This hotel is not typically Swissôtel; it has 600 rooms, 12 restaurant and bars.

We focus on ‘Swissness’ — punctuality, clean, uncluttered, contemporary image. We draw on the Swiss design statement and Swiss heritage in terms of food.

We used to be a daughter of Swiss Air at one stage and are now part of Fairmont Raffles Hotels International (FRHI).

How did you fare during the economic downturn of 2009 and do you feel next year will improve?

We did feel an impact. First of all, we had four excellent years, each one topping the other and all being record years in their history. And then came 2009, if we are realistic we accept the fact that after so much upswing eventually the pendulum swings back and this time it swung back big time around the world, so yes we see a downturn, but to me, I think the downturn next year will be more dramatic than this year.

Why do you predict that 2010 will be more challenging than this year?

Istanbul had a lot of business booked already, big conventions for example, so this year has kind of benefited from the past. From next year, the way business is being done is changing; it’s not seen as good conduct [for corporates to] go to five-star deluxe hotels.

We have seen a lot less pre-bookings for conventions. We have the biggest ballroom here with 1100m² and we have 27 meetings rooms, this is a very important part of our business, so if that doesn’t happen obviously we are suffering — and if it comes in, it comes in at lower prices.

Rates have softened but do you see them picking up next year?

We will see a very slight improvement in corporate markets, a slight improvement in the leisure segment, but we will see a dramatic drop in the convention business and that will drag the overall results down.

Obviously the shorter lead times means the more the prices go down because we are not full. We try to be holding up strong because as a long-term strategy its never good to lower prices, but nowadays you don’t lower prices; our business has also changed in that segment. Fifteen years ago you had four different rates and you applied them full stop, now you have probably 150 different rates and you apply them differently. Lowering prices no, but maybe you select less of the higher categories.

What development plans does Swissôtel have going forward?

We are spread out in Australia, Asia, Europe, have one hotel in America and two in South America. Areas of development are Europe, Eastern Europe, the Middle East, Central Asia, India, China and Russia.

Why does Istanbul attract travellers?

Istanbul is a city which doesn’t have too many five-star international hotels, so we live in a good neighbourhood and all of them are actually quite nice and spectacular in their own individual way.

It was very cheap previously; 2005 was the first year we topped the average rate of 1997. In 1997 business went down and 2001 was the bottom, with the bombing of the synagogue and HSBC building here in Istanbul and with the banking crisis, and then it slowly clicked up again and in 2005 it was incredible. It has got expensive and is levelling out a bit now.

Istanbul is still an attractive city if you compare the rates people are paying here with London, Paris, Rome and it offers something because you have history here and a generally pleasant city with friendly people You go to the old city for the culture programme and then go to the nightlife on the Bosphorus shores. It’s one of the cities when at 2am in summer you have a traffic jam.

Opening 2011: SwissÔtel Makkah

Swissôtel has recently announced its first hotel in the Middle East, Swissôtel Makkah in Saudi Arabia.

The 1571-room hotel is part of the Abraj Al Complex developed by the Saudi Binladin Group in the development of King Abdul Aziz Endowment Project.

Struger says: “It is our first entrance to the Middle East and is quite a dramatic opening with huge distribution potential”.

FRHI is also opening Raffles Makkah Palace and Makkah Clock Royal Tower, A Fairmont Hotel as part of the complex.