RIGA - Europa Group, a Lithuanian-owned hotel chain, intends to invest some 80 million litas (23 million euros) over the next few years in ambitious expansion plans for the Baltic states and Eastern Europe.
The group is set to open two new hotels in Riga this year and is planning to establish two more in Tallinn between 2007 and 2008. Two additional hotels are scheduled for Lithuania 's in Kaunas and the spa resort town of Druskininkai 's in the next two years.
"This will complete our expansion program in the Baltics. Our network of hotels across this area will give us a competitive edge," Europa Group CEO Martynas Kaciulis told the Baltic News Service.
"In the future, we intend to expand into Eastern European countries. We bought a building in Bucharest in February and also have plans to open a hotel in the Bulgarian capital of Sofia," he said.
Europa Group's hotel in Romania should open for business in 2007 or 2008, and the Bulgarian hotel in 2008. The group is also eyeing Warsaw, Bratislava, Prague, Budapest and Zagreb.
Europa Group plans to open its new hotel in Riga in November. The Europa Royal Riga, located in a historic building downtown, will include 60 rooms and suites, five banquet and conference halls, a sports and entertainment complex, as well as a casino. The total investment will amount to 24 million litas.
In addition, the Europa City Riga, a three-star hotel with 80 rooms, is scheduled to open at the end of the year, at a reported cost of some 17 million litas. The hotel will be operated under a franchise agreement.
In total, the group expects to generate sales of 3.5 million euros next year from the two ventures, said Kaciulis, adding that the Europa Royal Riga alone could reach 2 million euros in sales, while Europa City Riga could make 1.5 million euros.
Although the company does not expect to make a profit for at least a few years, Kaciulis said, it hopes to earn back the 8.5 million lats invested in construction costs within 10 years. "Usually our company plans to earn back investment in 10-12 years, but in Riga we hope to earn the money back much sooner," he explained, adding that Latvia's tourism market is "very attractive with a huge potential and great perspective."
"The government is doing a lot more than in Lithuania for the tourism sphere to develop. Latvia has a growing port, a passenger terminal, a growing airport, has managed to attract Ryanair, and is being advertised on CNN," said Kaciulis, adding that the tourism industry is set for major growth.
Meanwhile in Tallinn, a new 50-room business-class hotel, Europa Royal, and a 100-room tourist-class hotel, Europa City, are to open in 2007 to 2008.
The chain's expansion in Lithuania is to be completed by 2008 with the opening of two new business-class hotels under franchise agreements. The group currently owns three hotels in the country.
Europa Group, which is owned by two Lithuanian private individuals, aims to boost its annual revenues to 40 million litas within the next three years, up from revenues of 11.5 million litas in 2004.
