The Radisson SAS Hotel group and a Finnish construction company, SRV Development, with several foreign investment banks are planning to establish the highest building in Tallinn, a new 25-story Radisson SAS hotel. The five-star hotel, which will be opened in a year, is the biggest foreign investment in Estonia so far.
The value of the hotel project is over 40 million euros, which is about 600 million kroons. The construction work started in spring 1999. According to Ilpo Kokkila, representative of the SRV Group, 11 stories are ready and about one story is built each week.
The height of the hotel will be 103 meters. Architects Vilen K�nnapu and Ain Padrik designed the four-color glass facade of the building. The main contractor is the Estonian construction company Eesti Ehitus, which has been able to work under a tight schedule, Kokkila said.
The building complex will include 277 rooms, restaurants, conference rooms and 7500 square meters of office space. In 1996 and 1997 SRV Development built the neighboring Hoiupank headquarters and a parking garage for 600 cars.
“We had to choose among many possible projects, and we decided to build a hotel building because the country needed a high-class business hotel,” said Kokkila. “Many companies were interested in cooperating with us. The advantage of Radisson SAS before the competitors was its Nordic team and experience.”
“Not in every city can we see our name on the highest building of the town,” said Kurt Ritter, president and CEO of Radisson SAS Hotels & Resorts.
“People get more comfortable if they know what they can expect from a country they have not visited before and are willing to pay a higher price for a hotel with a well known brand,” said Ritter. “International brand names in towns of emerging countries increase tourism.”
Ritter said most American businessmen check the guidebook for a well-known chain before they visit a country and are afraid of visiting hotels with a local brand name. He said that he could not predict the price level at the moment, because it depends on the consumer base.
In Latvia for example, he said, when they entered the market, they had courage to raise their prices above their competitors, because there were a lot of interested tourists coming from Germany, Switzerland, Italy and the United States. But generally he is not satisfied with the Radisson SAS project in Latvia, because the hotel is too big for that type of clientele.
“It is difficult to fill a 350-room hotel with tourists willing to pay a high price. I would have built 280 rooms instead. But it was not our decision. The hotel was built when we bought it,” said Ritter.
In Lithuania, the SAS Radisson was too small. The number of rooms had to be doubled by buying a neighboring house.
“The 60 rooms of Radisson SAS in Vilnius were full all the time. I think we can still have another 60 rooms,” said Ritter. “The hotels in Vilnius, as well as in Tallinn, have the best location. I think its normal that they are full,” said Ritter.
All the rooms of the Radisson SAS in Tallinn will be the same size, 28 square meters, and have four different styles: maritime, oriental, Scandinavian and Italian. The young generation prefers rooms of Italian and high-tech interior, but the latter style was not selected for the hotel in Tallinn, although Baltic countries have developed fast in high-tech pursuits.
The owners of the Radisson SAS in Tallinn say the beginning of economic growth and EU accession talks will increase the need by 10 percent for high-class hotel rooms in Tallinn by 2001. By then there will be over 3 000 hotel rooms in Tallinn, and the room occupancy rate will average 56 percent.
The owners of the Radisson SAS Hotel Tallinn are the Finnish Construction company SRV Development, the Finnish Fund for Industrial Cooperation, the SAS Hotel Investment from Denmark and the Investment Fund for Central and Eastern Europe (I�-Fonden), also from Denmark.
Alain Miquel, manager of Mercure Hotel Tallinn, said the opening of an international Radisson SAS hotel in Tallinn is good news for him and the whole country.
“It may be difficult for us during the first few months, but generally it is good news for everybody. Every hotel has to improve one’s services,” said Miquel.
The only five-star hotel in Tallinn at present is the Park Consul Schl�osle. The four star hotels include Olympia, Scandic Hotel Palace, Grand Hotel Mercure Tallinn and a WTO hotel, under construction. Central and Viru hotels are three-star hotels.