Hyatt Regency Ekaterinburg is Worthy of Any European Capital

11.06.2009 — Analysis

For a few days Hyatt Regency Ekaterinburg hotel will be in the spotlight of the global political elite. On 15-16 June 2009 it hosts summits of Shanghai Cooperation Organization and BRIC. The day before the arrival of Russian President Dmitry Medvedev and his distinguished guests, Vadim Dynin, head of RusBusinessNews, talked to Marketing and Sales Director of Hyatt Regency Ekaterinburg Patrick Bayardo.

- Mr. Bayardo, three years ago Ural Mining and Metallurgical Company signed a management agreement with Hyatt International in respect of the 5-star hotel that was under construction in Ekaterinburg, for the term of 20 years. Why did one of the global leading hotel operators decide to take part in the UMMC tender and, for the first time in the CIS, run a hotel in a non-capital city?

- Let's go back a few years ago and look at the implementation of our strategy. Hyatt International has a managing company for Russia and CIS countries, as well as plans and ambitions for the growing market in this part of the world. It is the leading company that manages genuine 5-star hotels in Russia and the CIS, of which we currently have two - in Moscow and in Ekaterinburg. Ararat Park Hyatt Moscow has been setting the standard in the capital of Russia for six years. We are continuously searching for new projects in Russia that would be consistent with our growth philosophy. Thus, it was very logical that we should come to Ekaterinburg. It is typical of Hyatt to be the first to start up projects of such level in landmark cities.

Of course, we don't respond to just any offers that we receive. Certain standards must be met. When we received the invitation to the Ekaterinburg tender we examined it thoroughly: the city itself, and our prospective partner who is also interested in high quality. Looking at the interior one can notice a lot of details that are indicative of high quality. For instance, natural wood was imported from Italy. Certainly, pretty much our decision depends on the city. We want to be the number one player in the number one location. This is exactly our view of Ekaterinburg.

- Who should worry about the appearance of Hyatt Regency Ekaterinburg - local hotels that are not members of international chains, or, vice versa, global brand names - Park Inn that is already operating, or Novotel and Ramada that are under construction?

- We have not been the only newcomer in the Ekaterinburg hotel market recently. Sure, we will exert some influence, but let's look at the influence that all these hotels would exert. Today's situation is distinctively shifting towards international operators. Thus, the standards - the level of service, the basic level - are rising notably and immediately. It's very difficult to define our competitors in principle. We will certainly take away some of the existing hotels' clients, whilst these hotels, in turn, will take away market shares from some other competitors. You can say it's like rings on the water. It is difficult to say who will take whose clients, though.

I think customers will have a wider choice now. Price is not so much in question; rather, the level of service. The client who likes the hotel comes back again. On the one hand, the local hotels must worry about the growing competition; on the other hand, our hotel is essentially a hotel academy. Hotels are concerned that we will lure away their personnel but it's not our objective - we mostly hire staff from outside the hotel sector. Hyatt spends years developing know-how for hotel service which you can see in Ekaterinburg today. By the way, don't think that we only take customers from other hotels - we attract new clients into the city but they don't have stay at our hotel.

- Who are your clients, and why do they choose the Hyatt brand?

- Hyatt Regency Ekaterinburg is primarily a business hotel. For the definition of our customers we should look at businesses that develop in Ekaterinburg. We expect to have more guests from Russia than from abroad. We examine what kind of foreigners come to Ekaterinburg. They are mostly project managers, engineers. There are top managers too, but they usually stay in Moscow. Out of transnational companies represented in Ekaterinburg, only a few have large offices. In most cases these are small offices, with managers flying over from Moscow. Russia is a centralized country; this explains many things.

If we consider the hotel as a product, Hyatt Regency Ekaterinburg deserves being placed in any European capital, in any European city. As the hotel is situated in Urals, it has acquired some local flavour, but it nevertheless remains a part of the international chain. The quality standards that are maintained here are the same as in any Hyatt hotel in the world, be it London, Warsaw, Philadelphia, or Los Angeles. This is what frequent travellers appreciate.

- Hyatt Regency Ekaterinburg is not just a "bed and breakfast", but also a wide range of restaurants and cafes - and in the future, a wellness centre. What role is assigned to each of these segments?

- We primarily generate revenue from accommodating guests, although restaurants and cafes are an important part of our business. We hope that 60% of the patrons will come from the city. There are a lot of good restaurants in Ekaterinburg, but we have our won strength, which is stability. We offer the freshest products of the best quality. For example, fresh fish is delivered three times a week. We strictly maintain the character of our cuisine: Asian dishes are cooked by a chef from Asia, French - from France.

We want a client who remembered our meat to be served the same meat the next time he comes to us. As for our pricing, the margin can be lower than that of our competitors. Why is it so? Because it is important for us that 50-60% of the clients return for a lunch or dinner at Hyatt. You can't but agree that there is a difference between clients coming to us one or five times.

- SCO and BRIC summits are coming soon. What do the personnel and top managers of the hotel feel like on the eve of these important events?

- Hyatt has had an experience of hosting an SCO Summit before. We are happy to take part in this significant event. However, in general we will operate in the usual manner.

- What are your objectives for the second half of 2009?

- We plan to keep growing together with the city. It is necessary for the hotel market to attract new clients, and I think we will manage to achieve this.

- Is Hyatt a call for the foreign business to come to Ekaterinburg?

- We hope for that. This is due to the fact that anyone who arrives in Ekaterinburg sees a modern airport and the changing city. He sees a 5-star hotel with international standards. This is the first impression of the city. If this person has money, this will positively influence his decision to invest in Ekaterinburg.