Poland’s Orbis Hotel Group reports 6th year of record results
The Sofitel Warsaw Victoria hotel by Orbis SA, a leader in the CEE hotel market.
CEE’s leading hotel investors Orbis SA transforms its business to further leverage its position in the CEE hotel market.
Poland and the CEE’s largest hotel investor Orbis SA underwent a fundamental transformation in 2019 and reported rising earnings and profits for the 6th year running.
We find out more about this company’s rise and which role their strategic partnership with Accor plays in it.
Shifting the focus at Orbis SA
Warsaw-based Orbis SA underwent quite a change in 2019. After building the largest portfolio of hotels in CEE, the Polish hotel investor decided to split their business into an asset-light service branch and an asset-heavy hotel real estate-focused investment business.
The asset-light part was sold to French hotel giant Accor for roughly €282.8 million and included 66 franchise and hotel management agreements as well as a pipeline of 42 new properties.
This step has allowed Orbis to completely shift its focus on hotel real estate development and investment, an area they want to cement their market leadership in.
“With 73 hotels in six CEE countries, Orbis enters a new era of growth together with a new shareholder – AccorInvest that is in the acquisition process of Orbis shares from Accor. In order to ensure the best service quality and have access to international brands, Orbis entered into a management agreement with Accor for its 73 hotels, which is the next step in our cooperation,” Gilles Clavie, President and CEO of Orbis said explaining recent developments.
“Our perspective is changing, but we still strive to strengthen our leading position in the region and despite the intensive transformation process throughout the year, we were able to improve our performance in all strategic areas,” Mr Clavie went on to say.
Impressive results build optimism for future endeavours
Despite the many changes happening at Orbis, the company has still managed to achieve impressive results for investors, shareholders and clients.
By taking advantage of the economic growth in the CEE region and leveraging their knowledge of these markets, Orbis increased their results for the 6th year running.
Revenue increased by 4.6% and reached €329 million while operating EBITDA grew by 12.6% to €115.8 million.
These results were possible thanks to Orbis’ strong performance at the operational level in key markets. RevPAR (revenue per available room) was up 5.5% and reached €46.66 group-wide.
According to company leadership, this is due to an improved revenue management strategy which allowed Orbis to lift its average price by 4.6% compared to 2018 while maintaining occupancy rates.
A closer look at Orbis’ main markets reveals a 4.4% growth in Poland, a 9.1% growth in Hungary and a 4.2% growth in the Czech Republic.
A positive outlook for 2020 and beyond
After transferring Orbis’ asset-light branch to Accor, the company’s hotel portfolio now consists of 73 owned and leased properties in six countries, i.e. Poland, Hungary, Czech Republic, Romania, Slovakia and Lithuania.
The plan is to leverage the unique know-how and expertise Orbis has in the CEE hotel investment space to create an optimised asset portfolio and ensure long-term value creation and ROI.
Of course, CAPEX investments will be necessary to achieve this goal and Orbis is tackling this head-on. Four new hotels are already in pipeline in key cities and prime locations in Poland and Hungary and the team is scouting for other interesting projects in the region.
“Looking forward, I have no doubts that the Group is well-prepared to get the most of the opportunities arising from implementing a new strategy to strengthen its leading position in the CEE region. 2020 will be extremely important for Orbis not only due to integration with our new strategic partner but also due to Orbis’ upcoming 100-year anniversary. I am proud to be a part of this history and I would like to thank all our employees for their constant engagement, professionalism and trust which build our success, and which will be crucial for the future,” Mr Clavie summarized.