How hotel management is being implemented in non-hotels

Told by Planex Invest managers Bisera Peycheva and Petya Markova, Stroitelstvo Gradat Weekly, Issue 27 of 09/07/2012

Author: Deyan TODOROV


How does the process of service offering in holiday complexes develop once the period of large-scale construction has been replaced by a period of intensifying habitation?
Bisera: The building boom of holiday complexes in Bulgaria of some years ago created a large number of paradoxical situations in which luxury buildings (according to Bulgarian standards) stand amidst areas of inadequate infrastructure, of no facilities or landscaping. Today we are faced with the problem what to do so that owners and tourists in both boutique- and mainstream complexes can feel well and have good holidays. This is a challenge for the companies which manage holiday complexes. For many years ahead we’ll be tackling unwise central- and local government policies, which have permitted such kind of “urban development” for holiday areas to happen. Regardless whether he is owner or tourist, the guest who stays in a holiday complex wants to have rest and entertainment. Until 4 or 5 years ago the developer had to only sell apartments and nights; today the customer buys additional services, not just a holiday apartment. If he’s an owner, he invests and is expecting profit return from his investment, i.e. he buys the services related to his property management plus tourist attractions, cleanliness, maintenance, good servicing, infrastructure, park environment, accessibility, public services in the resort.

Petya: I like the word evolution because it is positively charged. I feel that we have been tired by trying to find a universal excuse in the crisis. Well, the crisis did cause delay in the growth rate in all aspects of economic life, but on the other hand it provided a reason to escape from routine decision making.
The process of holiday complex management provides potential for the applying of various business ideas and approaches to customer servicing and profit generation. Today it’s not enough to just sell apartments and clean the pool and common areas. You have to offer memorable experience, if you want to attract more tourists. We, at PLH Invest, channelled our efforts in this direction in the recent two years: we manage over 150 medium- and high class properties along the whole Black sea coast. There we offer not only nights but diverse tourist services as well - starting with children’s entertainment and rent-a-car, to shopping, thematic folklore nights, excursions, gifts and SPA treatment.
Everything, which we offer, has been tailored to the specific needs of our guests – Polish, Slovaks, Czechs, Russians, Scandinavians, and Bulgarians. We became flexible in holiday sales. We focused mainly on the Internet and various online platforms and booking systems. We communicate with our customers via the social media and our intention is to promote our brand My Vacation in Bulgaria on the markets of Central and Eastern Europe and in Bulgaria.
 
Is holiday apartment management getting closer to hotel management? What are the main similarities and differences?
Petya: Management of holiday apartment complexes essentially is hotel management in non-hotels. This has its advantages – larger freedom, pricing flexibility, friendly attitude, homelike setting. Another important aspect is that guests have privacy, quiet and extra facilities, so that they can feel like in their own home. This is not just rental or just hotel accommodation but a harmonious combination of the two.
The organization and manner of work at negotiating, accommodation and service providing for the guests are similar to that in hotels. Difficulties arise mainly from the fact that the majority of holiday complexes were built without perspective for the respective service rooms and conditions needed for efficient service providing, which are mandatory for any hotel. This deficiency hampers staff work and management.
In Bulgaria the concept of using holiday apartments for recreation is somewhat distorted because of customers’ needs and culture. By definition, self-catering means accommodation in furnished apartments equipped with all amenities needed for food preparation and holiday makers clean the rooms by themselves; there are no hotel maids or change of linen and towels during guests’ stay. In our reality this practice is more difficult to apply. Additionally, daily cleaning is a way to check on apartments’ condition. This being said, we undertake the daily cleaning and in this way we can monitor for the condition of the apartment and fulfil our engagements towards the owner with whom we have a contract signed.
 
What issues arise from the lack of official regulatory document referring to holiday villages for seasonal use and owners living in a third country? What solutions do you find? How far the Condominium Act provides solutions and what new obstacles does it raise before the efficient maintenance of the quality of both complexes and offered services?
Bisera: The Condominium Act regulates the management and maintenance of the holiday complexes to a certain degree. Art. 2 does provide for settlement of the contractual relations between investor and customer at the time of purchasing through the signing of contract for property maintenance and management. The question is what happens after: what are the sanctions for the owner or the investor if they do not register the property, what are the obligations of the service-providing company, respectively the owners, what is the managing regime/body, etc? These questions and many other do not find their answers in the Condominium Act. The problem is that everyone interprets the law in their own way; there is no court practice and everyone looks for their own ways to assure for the implementation of contracts.
Another aspect of condominium management is that the owners in these complexes, mainly foreign nationals, do not know the legal requirements. Even more difficult is to hold a general meeting of the owners because each of them visits their property at a different time throughout the year. We rely on continuous communication with the property owners and we insist that they should be informed as early as the very moment when they decide to buy the property. Apart from this, we are looking for ways to develop additional services and at the same time to maintain a high quality of building maintenance.
 
Petya: A serious problem related to the operation of holiday villages is that this activity is not very precisely defined by the law. Every year the Tourism Act and the Categories Regulation are being amended and supplemented. In the first years, in all municipalities we were faced with the problem that the officials themselves did not have clear knowledge on the management and regulatory statute of this type of objects, in which hotel accommodation is being offered in an apartment building, where the apartments are owned by different natural persons. In this situation everyone interprets the law in whichever way they find convenient.
 
What is the weight of management contracts when customers decide to purchase a property? In what way the presence of a professional manager influences factors such as customer trust, interest in the property, sales prices?
Bisera: International buyers insist very much on the professional maintenance in the building and management of the property which they purchase. In 80% of the cases we meet the prospect buyers in the process of viewing the apartment before the purchase is made. In this way, trust is being built between the parties; they get to know the facility manager of the complex in advance. This is a practice in our company, which I find especially contributing to the good owner-company relationship.
Petya: The management contract has different weight for different customers. It's very important for the Irish, English and Slovaks. For Russian customers the purchase of a holiday property is not so much a profitable investment but rather an investment in holiday making; with them cost return is of no consideration. That’s why the provisions concerning maintenance, security, payment of bills and additional services are especially important in this case.
The fact that we offer a full set of services to our customers – starting with apartment purchasing to furnishing and maintenance of common areas to management and leasing is an advantage for us and wins us loyal customers.
 
What public services are inadequate to the holiday villages, which are typically situated at the borders of Black sea cities or outside them? How do developers overcome the issues of hardware infrastructure – such as roads and sewage systems, water treatment facilities and power lines?
Bisera: Everyone knows about infrastructure problems of the Black sea resorts: bad roads, lack of sewage system, obsolete pipelines or lack of water supply or electrical power lines, destroyed or neglected parks, waste-littered beaches, and derelict tourist sites – municipalities complain from insufficiency of funds regardless of the fact that they collect local fees and taxes. Electricity distribution and water and sewage companies also complain of financial impossibility to build the necessary networks and facilities, although they never miss a chance to charge the business for even the tiniest service they provide. And in fact developers are forced to find their own solutions: they treat against mosquitoes and ticks; they asphalt lanes, build transformer stations…
 
On which improvements should local governments focus in the operation of existing infrastructure, how do you think?
Bisera: Accessibility is the key word on which local governments should focus: transport accessibility from the outside and also inside cities and resorts, accessible services and administration, parking possibilities. The service providing companies of the local government should focus their efforts on the development of in-depth and long-term plans for prevention, maintenance and investments in the upbuilding of existing facilities, because nothing is permanent. To better plan urban development and to stop random building and “stall building” in the resorts, to preserve and develop parks and green areas, children’s playgrounds, cultural and historic monuments. In this way tourists will be attracted, as well as members of the more solvent middle class who appreciate nature and seek quality recreation for their families.
 
In the resorts where your company has projects, how would you prioritize the needs for expanding and improvement of public transport, traffic management and parking, improved reliability of power supply and water supply and sewage? What recommendations do you have for our resorts – how can they be made more attractive to a larger number of tourists and individual investors in real properties?
Petya: We manage holiday complexes along the whole Black sea coast from Kavarna to Sozopol. In all places we face the above-mentioned problems to varying degrees.
A problem of foremost importance is the lack of electricity and water supply, no matter how shocking this may sound in the 21st c. Everyone has heard about the problems in Obzor concerning electricity and water, and beach maintenance. We have a problem when the local government decides to repair main roads at the beginning of the tourist season. In this situation it’s a real challenge to explain to dozens of tourists arriving with their own vehicles how to reach the complex through by-roads and narrow lanes. The central government and municipalities have to channel their efforts and funds towards the maintenance of beaches and the coastal line in general, building of water treatment stations, development and improvement of tourism areas, the overall strategy for tourism management in the country.
People decide on a summer holidays because of the sea and the beach, and if these are in poor condition, people won’t visit Bulgaria the next year. Especially considering that we cannot compete with our neighbours Turkey and Greece in respect of prices.

Bisera: There is another significant issue which falls within the competencies of the central government and which will take a long time to be resolved. This is the professional training of human resources. If we have a look at the programs of Bulgarian universities and colleges, many of them offer studies in “Tourism.” But in fact well trained staff is hard to find: starting from hotel maids and gardeners and ending with managers.
 
What are your impressions on the developments taking place in respect of sales and major markets? What changes do you see in customer preferences and quality-price balance?
Bisera: In recent years, Russian nationals accounted for a significant share in the sales of holiday properties on the Bulgarian Black sea coast. For our sites in Obzor, Byala and Kavarna this share grew up to about 85-90% in 2011 and 2012. What draws attention is the change of customer type: the current Russian buyers of Bulgarian properties are of limited budgets and they pay attention to all extra charges, which accompany their purchase. Respectively, the main demand shifted from large luxury apartments to smaller properties of low end price. The price range is strictly limited between 20 to 35 thousand Euros. In this price range quality can hardly be a leading factor when a purchase is being made.


Bisera Peycheva is Property Management and Operation Manager in Planex Invest Ltd. Graduate of the University of Economics in Varna, majors Marketing and Sales Management. Works in the field of facility management for eight years and develops the overall activities of Planex Invest Ltd. Currently Bisera manages a staff of over 120 and organizes the maintenance of facilities of gross built up area of over 145,000 sq.m.

Petya Markova works with Planex Invest since 2006 and launched the Property Management operations. Owing to her experience in the field of tourism and hotel management she develops this service in the holiday complexes, which led to the registration of company's own brand My Vacation in Bulgaria. Ms. Markova coordinates the marketing, customer accommodation and service providing in Planex Invest holiday complexes along the whole Bulgarian Black sea coast.