On a mission for Warsaw

27.3% fewer foreign visitors entered Poland in 2001 and this on the back of three years of consistent slide. There are around 6,500 available hotel rooms in Warsaw with an average occupancy rate of only 56.8% and this shortfall is likely to worsen, if nothing is done to tackle it. The city's hotel industry needs a vision and plan to get more travellers coming to the city.
Alex Kloszewski, Chairman of the recently formed 'Destination Warsaw Project', has both.

People with cash to spare in Western Europe are spending it on weekend breaks, mostly to foreign capitals such as Paris, Berlin or Rome. What about Warsaw? For a start, it's not a destination for any of the budget airlines, such as Buzz, Easyjet or Ryan Air, which take passengers for next to nothing to elsewhere in Europe and flights to New York are generally cheaper. The thousands who will have 'done' one or two cities in Europe, are therefore unlikely to turn to Warsaw as their next port of call. The city is quite clearly missing out.
Enter Alex Kloszewski, Chief Operating Officer of Global Hotels Development Group Poland, (managers and preferred developers for Holiday Inn hotels in Poland), and now also Chairman of the 'Destination Warsaw Project'. This project, brainchild of Mr. Kloszewski, is about to go into full throttle and signals a battle between the city's hoteliers and those empty rooms. The situation couldn't be more urgent according to Mr. Kloszewski as ,...there is going to be a major hotel opening [in Warsaw] every six months for the next four years", which is a 100% addition of fresh stock. Unless those weekend tourists start visiting the city, the market will remain ,totally oversupplied", in the words of  Michael O'Hare, Central and Eastern European partner of Howarth Consulting, (consultants to the tourism, hotel and leisure industry) based in Budapest.

Warsaw as a product
The main aim of the project is to create a "product" out of Warsaw, which can be sold to various "feeder" markets internationally. Poland's capital has a problem with its image: it doesn't really have one. Where it does, it ,is still a drab, dark-looking city with dilapidated buildings from the Communist era" for many people, according to Mr. Kloszewski. They may know about Lech Walesa and the Martial Law of 1981 but that's about it. The city clearly has much more to offer than that and this is what the Destination Warsaw Project wants to prove, to large numbers of potential visitors.

A consumer levy
Beginning with Warsaw's hotels, the idea is that eventually, every sector of the city's economy that has any dealings with tourism, will charge a 'consumer levy' on each product or service sold. The monies collected will then go into a fund, which will market Warsaw as a product, in those 'feeder' markets, in Europe and the US for example. It is hoped that the boost to tourism generated by this marketing activity, will benefit every one of the fund's contributors.
,Starting September or October 1st, the hotels will add 1% to each hotel room rental. So in other words, if you checked in here, [the interview was held in The Sheraton], and were paying $100 for the room, you would see 7% VAT, [on the bill] but there would also be 1%, that would say next to it, "Marketing Fund Warsaw", , says Mr. Kloszewski.

Marketing Warsaw
Mr. Kloszewski explains how the city is to be marketed: "You hire an ad-agency in Warsaw, that can come up with suggestions using focus groups from abroad, which tell you what they know now and what they would like to see out of Warsaw".
With this knowledge, those involved in the project will put their heads together to come up with this Warsaw 'product', examining what the city has to offer in terms of the arts, heritage and other attractions, then marketing it back to those focus groups. "It's not that Warsaw doesn't have them [attractions].  We have them but they're not exposed", says the project's Chairman.
Following the hotels' example, the project will then approach: various airlines to add $5 dollars on the price of a ticket, telecommunications companies to add one grosz to all outgoing international calls and PKP to add one dollar to every international train ticket sold. Car hire firms, taxi companies and even soft drinks giants such as Pepsi and Coca-cola will be asked to contribute to the marketing fund, by applying similar levies appropriate to their enterprises

Pan-European conferences
The Destination Warsaw Project does not only seek to exploit the city's untapped tourist potential. With Poland's impending accession to the EU, Alex Kloszewski envisages a significant increase in Pan-European business activity in Warsaw. Conferences and meetings involving such companies tend to occur every three or six months and once Poland enters the EU, a good many of these firms will be looking to invest in the country's economy.  This will bring enviable prospects for Warsaw's hotels and their conferencing facilities, as Mr. Kloszewski points out, ,These kinds of meetings, [Pan-European], will be of greater scale, as well as of greater frequency. Why? Because Poland is the largest market of any country that's gaining access to the Union".

Stimulating growth
Will the project actually spur hotel development in Warsaw?
"I would say that in the first five/seven years, you would just fill the gap [in occupancy]. Then after that, if we're successful, it would most likely fuel other developments," says Mr. Kloszewski.
There is a case study which he can personally vouch for. He created a similar fund in 1984, called SAB San Antonio Vacation Experience, in San Antonio, Texas USA. The fund, he says, started with $300,000 and now boasts ten million. ,And when I started in 1984, we only had 10,000 available rooms and now there are almost 50,000. They, [in San Antonio] have had a growth of almost 7%, year over year in occupancies and 3.5% in rates, for the last fifteen years. So it's quite sustainable."
In the shorter term, entry to the EU in 2004 and increasing numbers of business visitors, will cause other kinds of very ambitious developments to appear in and around the city, he claims.
"I'm talking about huge, international complex structures, with aqua-parks,  entertainment centres,  galleria shops office buildings and perhaps even convention-type facilities. There are operations like that throughout Europe. Amsterdam has one, Hamburg has one."
Mr Kloszewski imagines that any such complex, of which none yet exist in Poland, would initially be constructed on the outskirts of the city.
The Destination Warsaw Project represents a grand vision for Poland's capital, one that, should it meet with success, will most probably help to give the city a dramatic facelift, making it a tourist and business centre to grace the twenty-first century.
Marek Dabrowski, head of the Hotel Division at Colliers International in Poland, is very supportive. "I believe that the initiative will be very useful in generating demand for hotel and other tourism-related services, especially from foreign visitors. It is based on successful programmes in other cities or countries which were experiencing a drop in demand or excessive supply."
Mr Kloszewski is certain that ,we are in the right place at the right time" and is now in the process of getting both local and national government to add their weight to the project. The hope is that soon, Warsaw's 'dour' image in the eyes of millions will be a bad memory. And that's not all. Eventually, other major cities in Poland, starting with Wroclaw, should have their own 'Destination' projects up and running. In 5-7 year's time, it could well be all smiles in Poland's hotel industry.