Dejan Djordjevic in his interview to Hoteldeluxes.com

Last week the Ukrainian largest real estate investor ESTA Holding announced that in the first quarter of 2012 Donetsk will face the opening of a new hotel, Park Inn by Radisson Donetsk, developed in close cooperation with Rezidor Hotel Group, international hospitality leader. ESTA Group is currently developing the estate on the basis of Kiev Hotel that is under restoration in the framework of Ukraine's preparation for the upcoming European Football Championship 2012. Today one of the largest real estate holdings in Ukraine can boast of such luxurious hotels as Donbass Palace (Donetsk) and Opera (Kiev) being a part of its portfolio. The current hospitality trends in Ukraine and good reasons to invest in luxury hotel construction are covered by Dejan Djordjevic, Managing Director of ESTA Holding's Hospitality Business, in his exclusive interview to Hoteldeluxes.com.

- What do you think of the current situation and future trends at the hospitality market of Ukraine in general and in the run-up to EURO 2012 particularly?

- Preparations for EURO 2012 and need to welcome and accommodate all the championship visitors has boosted work over developing and implementing a wide range of new projects, featuring even those of national importance like road renovation, airport upgrading, stadium construction, etc. As for real estate and hotel business in particular, the event of such large scale is bound to have its effect here as well. Lack of quality hotel rooms in host cities resulted in the enormous number of projects in hotel business. Implementation of those projects declared for EURO 2012 will serve as an actual acid test for the actual players operating in the real estate market.

- How favourable are conditions for investing in 5-star hotels in the capital and regions? Has the situation really changed?

- I'd rather say that now Kiev disposes of sufficient number of 5-star hotels, and any new project might super-saturate the market. For this reason, investment in such hotels in Ukraine’s capital should be approached with proper care.

On the other hand, regions need rather 3- and 4-star hotel projects than 5-star ones, as the latter tend to face lower demand here and in fact are not needed as much.

- The Company operates 2 premium class hotels, Donbass Palace and Opera. Today you have announced the construction of the 3-star Park Inn in Donetsk. What is the direction to pursue, and does it actually mean that the Company intends to build on hotel development in various market segments, not just premium-class?

- In project development and investment, we plan to keep abreast of the market needs. Right now we believe it makes sense to develop medium-class hotels.

- What are the prospects of further cooperation with Rezidor and of opening other hotels in Ukraine?

- Rezidor is a well-established and recognized hotel chain that along with other benefits has a profound experience of operating in the Eastern Europe and proper understanding of this market's peculiarities. We are open for potential cooperation with this chain as well as with other internationally known operators depending on each specific region and segment of development.

- What hotel projects do you see as promising? Are they limited to Kiev and Donetsk only, or maybe other regions are also of some interest?

- ESTA Holding is still committed to developing unique and landmark projects both within our own portfolio and the whole Ukrainian real estate market. We consider developing some new projects in the regions as they show significant potential, but currently we're mostly focused on Kiev and Donetsk.

- Do you plan to develop this business line and become directly Ukrainian or international hotel operator?

- Hospitality development is clearly one of the top priority businesses of ESTA Holding; however, today it's far from being our only objective.

- As you know, hotel prices in Kiev and countrywide are among the highest in Europe, which is in particular caused by the lack of appropriate competition. How can this rate change in the near future? Do you think construction of new hotels and hosting EURO 2012 will affect this process? Are your hotels ready to cut down prices, if so, by how much and is that economically sound?

- Definitely. The pricing is bound to change for most Kiev hotels due to the entry of new competitors and increase in supply at the market. Hotels will seek to offer the most favourable conditions to their customers in terms of the optimal trade-off between service quality and price.

As for the pricing policy in ESTA Group's hotels, it still meets the needs of our guests by preserving the best value for money and has nothing to do with the forthcoming football championship.