Hotel boom puts Vilnius on business map

Take a stroll around town and you will quickly find that the Lithuanian capital is in the midst of a hotel-building boom.

In the first half of 2002 alone, seven new hotels opened their doors to travelers in Vilnius. While most of these hotels offer business-class service and demand business-class prices, they have managed to reap the benefits of brisk spring and summer hotel seasons in the city.

According to the Vilnius Municipality department of economics and tourism division, during that six-month period last year the number of hotel visitors ballooned to 110,049 - up almost 25 percent from the same period in 2001.

The swelling number of visitors caused a dramatic increase in room occupancy, rising to almost 48 percent during the first two quarters of 2002, up from just over 38 percent over the previous year.

Sonata Griskiene, director of the economic and tourism division, attributes the growth to Lithuania's increasing international profile in conjunction with targeted marketing.

"With NATO and the EU more people know about us and will visit us," said Griskiene.

The economics and tourism division has also been advertising in adjacent markets, such as in Riga and Tallinn bus stations and in the Helsinki media.

Yet this astounding growth both in hotel capacity and number of visitors in Vilnius shows little sign of abating, as no fewer than eight hotel openings are planned for this coming year, mostly in the spring and summer.

One such new hotel will be the Crowne Plaza, a 108-room renovated high-rise opening adjacent to Vingio Park in April. According to Rimantas Jogela, the hotel's director, more than 21 million litas (6.1 million euros) have been invested in the project, most of it by the construction firm Kausta.

"We plan to attract business travelers and families, which is in line with the Crowne Plaza model," said Jogela.

The Crowne Plaza will be tapping into the largest proportion of visitors to Vilnius-49 percent of hotel stays in 2002 were made by business travelers, while 33 percent visited for recreation.

Nonetheless, the Crown Plaza will be entering a growing yet saturated market for high-paying foreign and business guests. While numerous hotels charging upward of 250 litas per night are scattered about the capital, the number of rooms available for travelers on a tighter budget are scarce.

"Until now we only had two or three economy-class hotels, but we've had enough business-class options for a while," said Egle Viltiene, director of the Lithuanian Hotel and Restaurant Association.

"With more new hotels geared toward business travelers, they're going to have to lower their prices, and it may be difficult for them," predicted Viltiene.

Were it to increase the number of rooms available for budget travelers, Vilnius could bolster its visitors from neighboring countries, many of whom are unwilling or unable to pay hotel rates to which customers from Western Europe are most likely accustomed. For instance, Polish hotel guests comprise the largest single nationality of visitors and have tripled in number since 1998.

Besides the increase in international traffic through Vilnius due to the growing Lithuanian economy and increasing political integration, the current hotel boom could also be explained as a delayed catch-up process.

"Compared with Latvia and Estonia and with other Eastern European countries, the hotel industry in Lithuania has been inferior," explained Griskiene.

"We've suffered from a lack of hotels and a targeted advertising campaign," said Griskiene. "Riga and Tallinn were ahead in both, but we're meeting their standard now," she assured.

Also notable about the Vilnius hotel boom is the absence of an equivalent elsewhere in Lithuania.

Vilnius swallows the lion's share of visitors to Lithuania-77 percent. The next most frequently visited city is Kaunas, which only 29 percent of visitors to the country saw in 2001.

According to Viltiene, Klaipeda, which recently gained the Baltpark Hotel, is second to Vilnius in the Lithuanian hotel business. Nonetheless, Klaipeda only received 19 percent of Lithuania's total visitors in 2001, suggesting that the port city's potential for hotel growth is limited.

"The situation is definitely better than it was before outside Vilnius," said Viltiene. "Before, cities like Panevezys didn't even have a business-standard hotel-now it does."

Griskiene, who represents the Vilnius city government, said that as the commercial, political, and cultural capital of Lithuania, Vilnius was better positioned to receive visitors and support a thriving hotel business.

Moreover, Vilnius is the only municipality with a dedicated office promoting tourism, a fact which other regions need to heed.

Whether at the expense of - or perhaps even to the benefit of - other parts of the country, the current hotel boom in Vilnius stands to be supported by an ever-larger pool of visitors ready to fork over cash for a room with a view.