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Destination: Eastern Europe

As the debate about the UK’s membership of the European Union (EU) gets into gear ahead of the ‘in/out’ referendum to be held by the end of 2017, there are still plenty of countries in eastern Europe queuing up to join the EU club of nations.

Serbia and fellow Balkan states Montenegro and the Republic of Macedonia are currently ‘candidate’ countries to join the EU, although no date has been given for when they are likely to become members. Others, including Bosnia and Herzegov­ina, are classed as ‘potential’ candidates. The former Yugoslav countries of Croatia and Slovenia are already EU members.

This year has also seen Lithuania become part of the eurozone, joining its two Baltic neighbours Estonia and Latvia, which began using the currency in 2011 and 2014 respectively.

Beneficial effects

But does EU membership and using the euro as a currency have any ben­eficial effect for eastern European des­tinations in attracting more events and conferences to their major cities? Or are more practical issues, such as cost, facilities and accessibility, the decisive factors in meeting planners’ choice of venues?

Amanda Hanlin, director of global sales for HRG Meetings, Groups and Events, says: “Being in the EU provides greater protection for clients, particularly if something unexpected happens. Many clients also feel safer and more familiar when travelling within the EU.”

Mike Leeson, senior events manager at Chambers Travel Events, says there are also VAT advantages for companies hosting events within the EU. But what about the impact of whether the country uses the euro or not? After all, two of the most popular destinations in the region for meetings and events are Prague and Budapest, which are both in EU countries (the Czech Republic and Hungary) but still have their own currencies.

Talk to meetings buyers about these cities’ appeal and the main reasons for their popularity are value-for-money, good flight access (particularly to Prague), strong local organisation and high-quality facilities. Jennie Bryant is team leader for CWT Meetings and Events, UK and Ireland. She says having the euro does not seem to play a major part in clients’ choice of destination in the region. She adds: “None of the eastern European destinations we have booked this year have the euro, and it hasn’t affected the clients’ decisions to hold events in eastern Europe – the benefits far outweigh any non-euro complexities.”

Flight access

Prague is often stated as being the most popular city for meetings in eastern Europe and was last year ranked as tenth most popular conference desti­nation in the world by members of the International Congress and Convention Association (ICCA). Budapest, which was ranked 17th, was the only other city in the region to make the top 20.

Flight access is seen as being key to Prague’s attractiveness, as Click Travel’s meetings, incentives, conferences and exhibitions (MICE) manager Amanda Jardine says: “Prague’s competitive prices, easy access routes from key locations, and its central European position, straddling western and eastern Europe, make the city a great choice, particularly if there are delegates attending from all over the continent.”

Another option for event organisers is to use a regional hub, such as Austrian Airlines’ network of flights to central and eastern Europe from Vienna. Routes across the region include eight destina­tions in the former Yugoslavian countries, as well as cities in Lithuania, Poland, Bulgaria, Romania, Russia and Ukraine. And using Vienna as a hub to eastern Europe could become more attractive to some UK buyers when Austrian Airlines starts a daily service from Manchester to Vienna on September 10.

Whether the region’s flight con­nections are enough to attract global events is open to debate. HRG’s Hanlin describes air access to major cities such as Budapest, Prague, Warsaw and Riga as “fantastic”, which makes these desti­nations “accessible to clients no matter where they are based in the world”.

But Chambers Travel Events’ Leeson is not so convinced that the region’s major airport hubs can compete with other parts of the continent, especially when it comes to worldwide events. “The problem will always be the lack of flight access for global programmes,” he says. “The region cannot compete with western European hubs if you are holding a global programme.”

Growing popularity

If Prague and Budapest continue to be the headline attractions in the region, which other cities are starting to get more attention from MICE organisers?

The Baltic states are becoming a more popular option and the fact that all three have now joined the eurozone, which had previously increased on-the-ground costs in some destinations, has not de­terred buyers from choosing cities such Riga, Tallinn or Vilnius.

Both Hanlin and Leeson say that the Baltic states have grown in popu-larity in recent years and this trend should continue.

Leeson says that Riga is benefiting from new “infrastructure and resource” to cater for the meetings industry follow­ing the city’s distinction as a European Capital of Culture last year. The Latvian capital is also benefiting from new hotels from brands such as Mercure and Wellton, which are not only adding more rooms but also new meetings spaces.

“Tallinn is a popular tech event des­tination – Estonia is one of the most technologically innovative countries in the world and Tallinn, in, particular is known for its tech community and entrepreneur­ialism,” adds Leeson. “It’s among the top countries in the world for start-ups per capita and is the birthplace of Skype and Transfer Wise, among others. Estonia is becoming a popular destination for events where organisers are looking for a balance of innovation and cutting-edge technology alongside a historical backdrop and beautiful scenery.”

The Lithuanian capital of Vilnius should also benefit in the long-term from the opening of a new conference centre in 2019. The city will get a much sooner boost in September when Wizz Air begins flights from Glasgow.

The Romanian capital of Bucharest, once known as ‘Little Paris’ because of its wide boulevards and historic Parisian-style buildings, may also soon be more in vogue as a meetings destination. The Romanian Convention Bureau also talks up the city’s range of museums, art gal­leries, theatres and music halls, as well as major venues, such as the Romexpo exhibition centre.

CWT’s Bryant says: “I recently went to Bucharest on a fam trip and would definitely recommend it to clients as an up-and-coming destination. It is still very good value and there are some excellent hotels and unusual venues that would be perfect for gala dinners – our clients are always after venues with a ‘wow’ factor and we try to impress their delegates, but still keep to budget.”

Bucharest will also be boosted by the addition of the Sheraton Bucharest Hotel. Scheduled to open its doors on August 29, it will include 270 rooms, plus 1,200sqm of events space in a conven­tion centre featuring ten meeting rooms for up to 1,400 people, including two ballrooms and a boardroom.

Another destination that is likely to become more of an attraction, particu­larly to UK-based buyers, is the historic Polish second city of Krakow, which is benefiting from new direct flights by British Airways from Heathrow, operat­ing four times per week, as well as the long-awaited opening of the ICE Krakow Congress Centre.

This new facility, which was unveiled in late 2014 after 12 years of planning and construction, features 36,000sqm of meetings space – including the main auditorium, which can accommodate up to 2,000 delegates, as well as two smaller halls catering for up to 300 and 600 people respectively.

Krakow is also set to benefit from the opening in September of the Doubletree by Hilton Krakow Hotel and Con­vention Centre, which will add 232 rooms as well as 16 meeting rooms for up to 2,000 delegates. A Hampton by Hilton property is also located on the same site.

Economic sanctions

One area of potential disruption for eastern Europe is the ongoing conflict in Ukraine, which has led to the EU and US imposing economic sanctions on Russia due to its alleged involvement in the fighting. This, inevitably, has led to some nervousness among Russia’s direct neighbours, including the three Baltic states.

If the situation escalates, will this lead to companies looking for the safe havens of western Europe and elsewhere for their events? “Our key clients are still unsure about booking conferences and events in this location and wouldrather stick to western Europe – with Germany, France and Switzerland being booked the most outside of the UK,” says Click’s Jardine.

“Duty-of-care is as important a factor in organisations’ thinking now as it has ever been,” she adds. “Travelling to a dangerous or potentially dangerous territory just does not make sense if other options are available.”

Hotel round-up

Fears if a new ‘Cold Warbetween the EU and Russia over the Ukraine conflict have yet to affect the pace of hotel development in Russia.

Industry figures from research firm STR Global showed that there were 51 hotels being built in Russia in spring 2015, including 13 properties in Moscow, which will add 9,734 rooms to the country’s inventory. This represents the second biggest pipeline of hotel rooms in Europe, after the UK, which has 11,542 rooms under construction.

Russia’s boom in new hotels reflects both the long-term nature of hotel investment and the need for additional accommodation to host the Fifa World Cup football tournament in 2018.

Much of the development is being led by the big global chains – Intercontinental Hotels Group, for example, launched both Holiday Inn Express and Indigo brands in Russia last year.

Russia’s current hotel prices have seen the biggest fall in average daily rates across Europe during 2015 with Moscow rates down by 12.4 per cent to €105.74 and prices in St Petersburg tumbling by 10.6 per cent to an average of €65.91. These drops have been put down to the fall in the value of both the Russian rouble and the oil price.

Ukraine had one of the fastest-growing hotel sectors in the region before the crisis and this pipeline of developments is continuing, particularly in the capital Kiev, with Starwood planning to open an Aloft property in January 2016, while a Renaissance hotel is due to open in Kiev’s city centre towards the end of next year.

Poland is the other east European destination scheduled to see significant expansion of its hotel sector, with new Doubletree by Hilton properties in both Krakow and Warsaw, while a Renaissance hotel located next to Warsaw Chopin airport is also due to open this year.

Other notable hotel developments within eastern Europe this year include the Sheraton Dubrovnik Riviera Hotel in Croatia, which is the rebranding of an existing 250-room property with 1,000sqm of meeting space; and the opening of the first Park Inn by Radisson in Bucharest.

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