INTERCONTINENTAL loses ground in Central and Eastern Europe

InterContinental is one of the international hotel chains with the widest presence in Central and Eastern Europe. There are InterContinental hotels under management agreement in Bucharest (Romania), Budapest (Hungary), Kiev (Ukraine), Prague (Czech Republic) Warsaw (Poland) and Vienna (Austria). Most of the hotels, with the exception of Kiev and Warsaw have been open for more than 20 years and located within lackluster 70′s and 80′s architecture buildings. The newest hotels are in Kiev (2008) and Warsaw (2003), both standing out from the rest of the region, especially considering the design of the buildings and larger size of rooms.

The notable absences from the region are Sofia (Bulgaria) and Belgrade (Serbia), in the latter having terminated the agreement due to the low standards of the property of which the owners would not commit to a major renovation.

In the top tourist destinations of Prague and Budapest, the InterContinental is regarded more of a four star level hotel especially due to the high standards set by Four Seasons (both capital) and Mandarin Oriental (Prague). Although recently renovated, the Budapest InterContinental remains the five star rated hotel in the Hungarian capital with the smallest rooms.

One of the properties with the lowest ratings and reviews is the Bucharest InterContinental, which due to changing its ownership in the past decade has still not completed a vital renovation process. The hotel which held a monopoly position during the Communist era being the only five star hotel in the Romanian capital has failed to maintain its leadership when Romania emerged from communism.

Warsaw and Kiev are the only InterContinental locations which hold leading positions in the market. The rooms at Warsaw InterContinental are bigger than in the entire region and provides a good level of services especially for business travellers. The health club including the swimming pool are the best in the region, offering spectacular views of the Warsaw skyline. The top position as far as services and room furnishings are concerned, is held by the InterContinental in Kiev. The Warsaw property also leads as having the best Club InterContinental lounge.

Unless major strategic measures are taken, InterContinental risks to become a four star standard chain, at least in the Central and European region. This threat seems even closer due to the current economic crisis which makes some of the hotel owners take desperate cost cutting measures and postpone indefinitely any kind of renovation and refurbishment investments.