The projects under implementation: some pilot examples

The first pilot hotel project is being prepared for putting into operation, the option for the acquisition of operating hotel is in process of consideration.

We began with small pilot projects to create approaches and team for work in the sphere of hotel business. We divide work on creation of an object of hospitality into several stages: conceptual design; business planning and feasibility study of the project; outline and design engineering; coordination of the project with regional authorities and project binding to infrastructure; design engineering; construction; commissioning; the organization of functioning within the created hotel network. At all stages we involve highly skilled experts and specialized companies.

We pay special attention to business process automation and creation of the single integrated management system as for separately taken hotels, and the groups of hotels. For this purpose we use well known IT decisions for the hospitality industry, and we develop own program solutions as well. Much attention is paid to creation of own booking engine for reservation of rooms in the

Internet as much as possibility to orient operation of sales channels on own Internet resources. Also much attention is paid to own management of sales channels, forming effective price and marketing strategy which will not depend on numerous global and alternative distribution systems (GDS/ADS), which are tried to impose the pricing policy and take away at the same time 15% and even more of the income.

We create own global travel agency which will actively work on the market of tourist services, offering first of all, the hospitality objects belonging to the group. At the same time much attention is paid to interaction with airlines reservation and other tourist agencies.

For developing of the conceptual approaches we participate both in creating hotels, and work on acquisition of already operating ones. Our first projects are placed in Central and Eastern Europe where the market of hotel services still is not saturated, and implementation of new technologies is very actual.

The projects under consideration: some approaches

Preliminary agreements have been reached with several European engineering and project management companies to work out detailed business plans of the project and provide the necessary financial layout.

There are several agreements reached with European real-estate and development companies experienced in hotel construction where and in what countries the hotels are to be built.

We assume a chain with up to 100 hotels may be constructed in Europe and other tourist attractive regions to meet the potential demands.

All hotels are to be in favorable seaside locations, hold different number of guests and provide services for different level of clientele. Hotels occupancy will vary from 50 — 150 —500 guests.

All hotels will be built in different countries with their individual style and on the land owned by the Holding company.

Hotels will include a variety of tourist attractions (water parks, fitness centers, sports grounds etc.). Most hotels will have bungalows or cottages to serve a variety of customers. Hotels will be equipped to hold conferences, celebrations, corporative events, have the necessary spaces, meeting and reception rooms.

It is also planned to buy the existing hotels in Europe and UK which need reconstructing or renovating (the company has already got such proposals) and acquire listed firms and organizations and not open them up from scratch. The project also envisages the construction of few rehabilitation and medical care centers in Europe.