Jesper Henriksen, former head of Radisson in Kyiv, will start a hotel chain in Ukraine together with two traders. The plan is to start building ten hotels, and the investment will be around $ 50 million.
There is a lack of better hotel deals on the outskirts of major Ukrainian cities for business travellers. This is how it sounds from Jesper Henriksen, former head of Radisson in Kyiv, who will now start a new hotel chain with the two traders Terry Pickard and Konstantin Ussar. Although funding still needs to fall completely into place, the three traders have big plans for the future.
They will build 10 hotels around Ukraine, which will form a new hotel chain in the country. It should be a cheaper alternative to the larger chains and focus on accommodation and not on the bar and restaurant, but instead on a safe and cheap offer.
The idea started because there are lots of four and five star hotels in Kyiv, but in the rest of the major cities of Ukraine there is nothing. There are many hotels, but you do not know what you get.
All the hotels are run individually, often with Ukrainian ownership and often run as a private ego project, and there is therefore a lack of a common thread for the hotel supply outside Kyiv.Jesper Henriksen
A simple hotel
The total of 10 hotels that Henriksen expects to be built, to fill this gap of the market, will require an investment of around 50 million dollars (about 313 million kroner) and he has contact with a number of investors. However, there is still some way to go before everything is in place.
The hotels do not want a bar or restaurant, but instead plan to enter into an agreement with McDonalds, which will rent part of the hotel. According to Henriksen, this will ensure the hotel a rental income and the guests the opportunity to dine without having to be run by the hotel. Running your own restaurant and bar in a hotel is often a big investment with very little return, Henriksen explains. Each hotel should have from 120 to 180 rooms, depending on the area, and there should be good opportunities for parking.
We know that it is the business travellers who are responsible for a large part of the occupancy rates at the hotels, and they will know that too. Therefore, we must make sure to adapt the hotel to them,
says Henriksen, who states that an overnight stay may cost anywhere from 45 euros for one night to 65 euros, but that it depends on the market. “We are not going to make a four or five star hotel. We are making a really good and sharp budget hotel that is located a bit from the city center.”
Henriksen explains that the development in Ukraine right now seems to make the idea of a hotel chain around the country even more relevant. Well enough, Covid-19 makes everything uncertain, but it can also be turned into something positive. Henriksen expects that in the future more people will drive by car instead of taking trains to avoid contact with too many people, and here they will need a hotel with good parking.
In addition, the Ukrainian politicians are in the process of a major expansion and renovation of the Ukrainian infrastructure, which Henriksen hopes will be successful and, if necessary, get more people to drive on the country’s roads.
Our concept will fit in even better if it is successful, and we believe that people will choose our hotel, as it will be easy to park and because you know what you are getting.Jesper Henriksen
Corruption can be dealt with
Henriksen is not worried about the war in the Donbas region, as it will not have an impact on the areas where they plan to run hotels. Instead, he has made several considerations about the corruption in the country, especially because the hotels have to be run around the whole country.
“It simply came to our notice then. It is important to us that the investors who come in are strong, so that we can scare away the corruption. With an investment of 50 million dollars, we will also create a number of jobs that may help us, and we will have access to the State’s “investment nanny”, which will help us”, says Henriksen, and refers to the fact that the Ukrainian State has promised all major foreign investors help in protecting their investment and helping them along the way.
We hope it can put pressure on the whole thing, because we need a backup here. We do not pay for corruption. There are no black boxes with us.Jesper Henriksen
In relation to the time frame, the project is a little more uncertain. Henriksen tells Ukrainenu that there is a dialogue with a number of investors who have expressed interest in throwing money into the project. Here, among other things, there is a dialogue with Danish investment institutions.
But when the first sod cutting will take place is still uncertain. Henriksen does not believe that everything will be in place until sometime next year, or when there will be a corona vaccine on the market. Covid-19 must first be managed, he says.
When we first talked to investors about our idea, they were like that – agh no thank you – because of the big corona issues. But when they got the project presented, there has been interest, but we still have to have the corona at a distance first.Jesper Henriksen
Written by: Stefan Sigaard Weichert