Howard Johnson: We're in talks with suppliers to cut prices by as much as 10%

Sonia Nastase, the new general manager of Bucharest Howard Johnson five-star hotel, controlled by businessman Gabriel Popoviciu, says she is negotiating with the hotel's suppliers to cut prices by as much as 10% in a bid to bring down total operating costs.

"Suppliers must understand and share the pressure we're feeling now. When we looked at costs, we focused on suppliers, and not on services provided to clients," stated Sonia Nastase, without specifying which are the hotel's main suppliers.

Sonia Nastase, 37, came at the hotel's helm this month, replacing British-born Peter Craig Martin. She is the first Romanian running a Bucharest five-star hotel, for a two-year term, while the general managers of five-star hotels Intercontinental, Hilton, JW Marriott, Radisson or Crowne Plaza are expats.

"It's difficult to draw up budgets for this period and to make realistic forecasts. It would be very difficult for me, though, to work without goals, which is why we're now drawing up next year's budget and strategy," she said.

In the first nine months of this year, the hotel posted revenues of 6m euros, while turnover estimated for the entire year amounts to 9m euros, down 30.7% from a year ago.

The five-star hotel operated with a 50% occupancy rate in the first 8 months and cut prices by 25-30% from a year ago. "In 2007 and 2008, very good years for hotels, the occupancy rate on the five-star market stood at 70%, generating profit. Now, the occupancy rate dropped to 50%, a situation that is valid for the entire five-star market," she said, adding that September brought an increase, with entire weeks that saw occupancy rates even as high as 80% as a result of event organisation.

Most clients are business ones, while the number of clients coming on holiday in Bucharest is very low. "For tourists, we have the lowest accommodation prices," she said, adding a room costs 100 euros per night on average.