Kaunas hoteliers investing in compact, high-end business hotels

  • 2000-03-09
  • By Darius James Ross
KAUNAS – Once Lithuania's most important industrial center, the city of Kaunas has seen some tough times in recent years as the Lithuanian government and foreign investors focus their attention on Vilnius. The recent economic crisis has seen the city's official unemployment rate explode from 5 to 12.5 percent in 1999. Kaunas, nevertheless, remains Lithuania's second largest city with a population of 415,000 and maintains a presence in light industry and textile production.

Optimistic local hoteliers are gambling that the city will retain its position as a manufacturing center over the long term and invested heavily in improvements in 1999. Newly renovated hotels in Kaunas are compact, cater almost exclusively to the foreign business traveler and offer high quality rooms and service in the $80-100 per night range.

One of the better Best Westerns

Travelers accustomed to the Best Western chain's unimaginative corporate shoeboxes will be pleasantly surprised by the 40-room Santakos hotel on the quiet J. Gruodzio Street just off the central pedestrian thoroughfare of Laisves Aleja.

Santakos is privately owned by two Lithuanian businessmen and has been paying an annual membership fee in order to use the Best Western name and reservation service since 1996. It opened a new wing with 29 new rooms just last year and is subject to random quality spot checks by Best Western's inspectors who maintain a list of over 100 criteria for their member hotels. These include 24-hour room service, a full breakfast menu, conference facilities, mini-bars, staff fluent in English, soundproof insulation and electronic key-card locks.

The hotel was the first to earn four-star hotel status in all of Lithuania, having met the tourism department's 211 requirements for this distinction. A quick tour of some of its facilities reveals why. The actual building, constructed in 1895, was once a wine depot. The design team has done its best to conserve the features of the original structure. The red brick walls and wooden beams have been unaltered where possible. Open concept stairwells feature large windows, iron railings and marble stairs.

The rooms are tasteful and functional. They feature quality Lithuanian made furniture, heated bathroom floors, bidets as well as satellite television and Internet compatible phone jacks. A popular discotheque is located in the basement along with a sauna, swimming pool and 60-seat conference room.

"The only things we're missing right now in order to achieve five-star status are an underground parking garage and an exercise room," said Linda Stankuniene, Santakos' manager. Five stars do come with a price though. "We're not going to bother with the five stars. They'll only scare our clientele away. There's no market in Kaunas for that type of hotel, they're for movie stars and foreign heads of state and belong in Vilnius, they're not for business people," said Zigmantas Dargevicius, one of the owners.

Ninety-eight percent of Santakos' guests are foreigners – mostly Scandinavian and German business travelers with some North American tourists in summer. Dargevicius and his partner have also purchased an adjacent building with a view to future expansion. "Kaunas is often overlooked by the government but it is still this country's second city and has twice the population of Klaipeda. I am not afraid to invest here," he said.

The brand new Kaunas Hotel

Not far behind Santakos in room quality and range of services, the privately owned Kaunas Hotel opened its doors in May 1999 and is located on Laisves Aleja. Only slightly larger than Santakos at 43 rooms, the building nevertheless lacks the architectural charm of its competitor. The lobby and hallways have a paint-by-numbers feel but are clean and modern. Rooms are slightly smaller but just as functional. The ones overlooking Laisves Alejus have a far nicer view than those facing the dingy courtyard.

Occupancy rates have been low in the last year but management believes this is normal for a new hotel.

"Right now we're looking to join one of the major hotel chains so that we can plug into a world-wide reservation service. The DM 20,000 that Best Western wants annually is a bit high. Reservations are picking up and tourists are already booking rooms with us this summer," said Dalia Pileckiene, the hotel manager. "Competition is fierce in the off-season but whenever there is a large conference in town, there is always a shortage of rooms in this city," she said.

The hotel will be applying for four-star status in near future. The owners have bought a building behind the hotel in order to build the sauna, swimming pool and conference facility required for this designation.

Thor's House

Guests staying at Perkuno Namai (Thor's House), a five-minute drive from the city center, will usually find the owner and manager, Vidas Zekas, hovering near the front desk ensuring that they receive the best possible service.

His was the very first private hotel in the city. In the late 1980s, he worked as a project engineer for the Soviet-era Banga television manufacturer.

"Foreigners visiting our plant would stay in one of the state-owned hotels and would tell me how happy they were that the rooms had old-fashioned television sets and no maid service. The rooms were usually cold, so they would leave the television on all day to keep the room warm as the old tubes emitted a lot of heat, and because there was no maid, nobody would turn them off," Zekas said.

Taking his cue from their experiences, Zekas broke ground for his hotel the day after Jan. 13, 1991 – the day the Vilnius television tower was occupied by Soviet troops.

"That was when I decided I wanted to own my own hotel," he said. He built it with his brother-in-law on a large tract of land behind his grandfather's house and opened with 11 rooms in 1994. "The day I opened it dawned on me that I had no idea how to market a hotel. I was very lucky – my first customers were a pair of hotel consultants from Ireland who were invited here by the government. They gave me a full week of consulting for free," said Zekas.

Zekas will go to any lengths to keep his customers happy. "I once lent a guest the cord from my father's electric shaver. He had to go without shaving for several days. Sometimes guests mistake me for a porter when I help them with their luggage. We have a good laugh when I turn down the tip and I tell them I'm the owner," he said.

Today's rebuilt 30-room Perkuno Namai is located in a tranquil park-like setting surrounded by ancient trees. Rooms are well appointed and many have a balcony overlooking a ravine. The hotel restaurant was voted best in Lithuania in 1999. Zekas is also in the process of building the sauna and pool required for four stars.

"Frankly, Lithuania's tourism bureaucrats are trying to reinvent the wheel. They got to live it up in posh hotels across Europe at our taxpayers' expense in order to come up with their list of standards. They still don't get it. Most of my guests are Scandinavians. Scandinavians don't use hotel saunas as they usually have their own at home. For them it's family recreation, for Lithuanians a sauna is a place to party and drink," he said.

That isn't the only oddity that the civil servants have come up with. "Even worse are regulations such as the hotel's restaurant requiring at least one window and several paintings. What if my restaurant is in a converted cellar as is the case with many restaurants in Lithuania? What if I want to hang photographs instead of paintings? To top it all off, there isn't a single regulation concerning fireproof bedding and carpets," said Zekas. He is definitely ahead of the game and has followed European standards for all materials, lighting and alarm systems in his hotel.

Zekas has thought of everything. He has installed a water filtration system to make tap water potable. Guests can use a voucher system with a local taxi company to avoid carrying cash. People are encouraged to re-use towels so as to reduce phosphate pollution.

"I want to treat my guests the same way I would expect to be treated. My guests always come back here because they remember the great service," said Zekas.