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Sell in May and go away (to a good hotel)

  • 1998-08-06
  • Chris Butler
Sell in May and go away. The adage of City of London stockbrokers can be applied just sa well to the Baltics. Last week, the Lithuanian National Stock Exchange actually came to a standstill one day when not a single price was established for any issue on the blue-chip Official List. This is as sure a sign as ripening corn that high summer really has arrived and that businesses up and down the Baltics are turning their attention to their summer holidays.

The arrival of summer in the business world coincided with the announcement that hotels and motels in Lithuania will be rated according to the star system after September this year. This is tremendously good news for business travelers and tourists alike, as it should bring about an increase in standards throughout the country and will assist the buyer to no end in making the decision of exactly where to stay.

At this time of year across the Baltics, there may be a lack of demand for shares on the stock market, but there is certainly no lack of demand for hotel rooms. During the summer months, the combination of businessmen and tourists is often too much for the existing stock of hotels in the city centers to accommodate. And don't even think about trying to get a room at any of the seaside resorts during the next three or four weeks.

It was ever thus. On my first visit to Lithuania, I was faced with the travelling businessman's nightmare - two weeks of planned work and only one week of an available hotel. The only beds that could be offered to me were in hotels of the no-hot-water-and-communal-lavatory variety, which is fine if you're backpacking but best avoided if you're wearing a suit and weighed down with U.S. dollars.

Fortunately, my boss in London at least understood my dilemma. "Don't worry," he said, "It happened to me in Frankfurt recently and there are a lot more hotels in Frankfurt than there are in Vilnius."

Today, although the number and quality of hotels in Vilnius has increased tremendously, the feeling among foreign investors is that more are still needed. There are a number of plans in the pipeline. Norwegian investors have bought the former Intourist monster the Lietuva and have ambitious modernization plans. Vilnius residents are hopeful that the modernization will be completed in fewer than the 10 years it took to build the hotel during the 1970s and 1980s.

The Sheraton Group has been trying for a number of years to close a deal on the former Vilnius Hotel on Gedimino Prospect. The rumors are that development is being held up by the inability of the local municipality to persuade an elderly couple to move out of their flat at the back of the complex, despite significant financial inducement being offered.

Although the redevelopment of this hotel would of course be extremely beneficial to that part of the city, I find it strangely appealing that the couple has been allowed to stay on in their flat. I'm sure in the UK a compulsory purchase order would have been slapped in, requiring the occupiers to move on pretty quickly. Still, by all accounts, the municipality has been asked to resolve the issue or risk losing the investment opportunity.

A third group is advancing the most ambitious plans so far to build a large hotel and business complex on open land close to the Lithuanian parliament building. Not only are the plans grand, but there is also there is some significance to the location. It is only eight years ago that Lithuanians were massed in this place, close to the barricades erected to defend their parliament from the Soviet army. Today they are hoping to see built on it a monument to business, tourism and the market economy.

In such ways is progress measured.