Hyatt Regency will not remain in business without guests

Tajikistan: Hyatt Regency will not remain in business without guests

July 25, 2006

Author: Nazarali Pirnazarov, Asia-Plus

Translated from Russian by Michael Gribov

Alexander Semchenko, general director of company Sozidaniye ("Creation" in English) spoke about the details of hotel construction in an interview with AP.

In the beginning of the year in Dushanbe construction of five five-star hotels began. Construction of hotel Hyatt Regency began on March 1st. The investor in the project is the company Russian Hotels, the customer of the construction company Soznaniye, the architectural design is done by NBBJ, the hotel operator is the world famous company Hyatt, and the general contractor is the Turkish company ENKA. The hotel will be constructed on 2.7 hectares on the coast of Komsomol Lake. The hotel is designed in a modern architectural style with elements of traditional Tadjik architecture. The building will consist of 12 floors and will have 218 rooms, including 5 delux suites and 1 presidential suite. The hotel will include a business centre, a conference hall for 200 people, meeting rooms, fitness-center, an entertainment complex and a large restaurant block with national, Russian and European kitchens. The breakeven period for the investment in the hotel is 7-10 years. Alexander Semchenko, general director of company Soznaniye ("Creation" in English) spoke about the details of hotel construction in an interview with AP.

Alexander Vladimirovich, please tell us about the progress of the construction of the hotel complex, and what sum is already invested?

During the opening ceremony at the beginning of construction of the hotel complex we stated that the sum of investments will be $65 million. Really this sum has not decreased and probably it will increase. The building is divided into separate blocks based on seismic stability factors and on functional parameters. At the present stage the foundation ditch is completely ready, the soil is compacted, and the concrete foundation is complete. By the way, the soil for the foundation is very good. Our contractors say that such soil is valued very highly all over the world. The soil is very dense, which prevents gravel from caving in and gives additional durability to the foundation of the building. Most of the work on waterproofing is done, and on two blocks the base concrete plate is already made. Columns and the wall are already filled in on a foundation plate of one of the blocks. The completed work is a good indication that construction is going according to our plans. The sum of total investments has exceeded $6 million to date. A small portion of about half a million is used for project design, and the rest is used for labor.

Will the builders finish within the deadline?

We are doing the best we can to keep within the deadlines we have set. And our efforts are tangible. We have received the authority to conduct construction in stages, which allows us to reduce amount of time devoted to construction. Usually at first the design is created, then it is approved by various departments, and only after that construction begins. Normally this takes about half a year. It is clear that with such a timetable we would not be able to make the planned deadline. This authorization allows us to design a certain part of the building, conduct all necessary approvals and begin construction in conjunction with projecting and approving subsequent construction stages. It is clear that this schedule makes things much more difficult and sometimes it is necessary to clarify the design directly on the building site. For us this is much more complex, but nevertheless, it allows us to finish construction by almost one and a half times faster.

In reality we can say that in May-June, 2007 the hotel will be completed.

Unfortunately we are lagging behind our schedule. We had to redesign separate parts of the building under Hyatt's operating standards. Hotels operated by this company are rated five stars and above. Accordingly the company makes certain demands regarding size of the building, type of building, and the size of the rooms. By the way, the area of the hotel complex has grown at least 30% after changing the design to fit the operator's standards. Instead of the expected 20-25 thousand square meters, the new project features an area that will exceed 35 thousand square meters. This imposes on us more obligations because for additional construction it is necessary to put additional efforts. Consequently there was a delay. Three weeks were spent making changes to the project. The second reason for the delay was, unfortunately, that receiving the authorizing documentation has taken more time than we planned.

What Tajik and foreign experts are involved in the construction project? How many people are involved?

Currently about 320-350 people are involved in the work. During the peak of construction we plan increase the quantity of workers up to 800 people. Our contractors have around half of the employees as Tadjik citizens who work practically at all levels. There are the people working in engineering and auxiliary services, technical experts and naturally construction laborers. Turkish experts also are involved in construction, and as far as I know the contractor does not plan to involve experts from other countries. When we presented our project we stated that after the hotel becomes operational the percentage of citizens of Tajikistan will be gradually come to 90% and above.

Could it be that Hyatt Regency will remain empty due to a shortage of guests because we have our own hotels Dushanbe, Vakhsh, and Tajikistan?

According to our research in Tajikistan high class rooms with good hotel service are in demand. Hyatt Regency unequivocally will not remain without guests. Over the last 3-4 years Tajikistan has changed and business prospers, major construction is happening, the country receives many visitors, businessmen, foreign companies are opening offices, and tourism is reviving. Therefore it is necessary to develop the hotel industry. There are no fears that there will not be guests. Hotel usage will also be high, but the concrete figure can be given by the operator once the hotel is finished. At this stage it is still too early to speak about this and try to estimate usage.

Alexander Vladimirovich, you mentioned that in Tajikistan it is necessary to develop the hotel industry. Does your company plan to build hotels in any region of our country, considering there will be opinions that there are too many hotels in our capitol?

As a rule, businessmen come from abroad specifically to Dushanbe. With the development of tourism it is not unlikely that we will find real construction opportunities for hotels and in other areas of the country. In the city at this stage we see a shortage of building areas for hotels, high class guest rooms, and also office buildings. Foreign companies are forced to rent private houses, and it is not a secret that real business centers where it is possible to rent an office and enjoy the whole spectrum of services and telecommunications are not present in the city. Therefore we decided to begin constructing a business center. The city's governor decided to allocate a building site for us, topographical and geological research has been made, preparation of the building site has begun, and we are now at the stage of developing design blueprints, and getting their approval by the necessary organizations, after which we will begin construction. I think that this question will resolve itself because we have a very good relationship with the city's administration, and we feel the city has mutual interests with our endeavors.

And where will the business center be located?

On the road to the airport along Ajni street. On one side of the site will be our business center, following this will be a site currently open to investors, further we will have the five-star hotel with investment from India, and on other side of the site already on the turn to the airport, subject to architectural planning, the residential complex will be constructed.

But in fact in Dushanbe two business centers are already under construction. What is unique about your center?

The potential demand for business centers is very high. I think that even these three business centers cannot satisfy demand, and we believe that business development is literally growing before our very eyes.

Let's return to construction of the hotel. It is under construction on the coast of Komsomol Lake, and on its presentation it was declared that Dushanbe citizens will not be left without their favorite vacation spot. Is this really true, and how will ecological norms be observed?

The hotel will not affect the city's ecology. In the summer it will still be hot, there will be a little bit of snow in the winter, in the spring everything will turn green, and everyone will be happy. Unequivocally the hotel is constructed under the highest standards, otherwise the operator Hyatt would not come here; therefore any waste or dumping in the lake is prohibited. Even now on the building site there is a wide-enough net to prevent any dirt from hitting the lake. From the very beginning of hotel design we have put our best efforts into maximizing the preservation of greenery on the edge of the park zone where our hotel will be located. The hotel was repositioned several times during design. The place was chosen so that deforestation is minimized. In the beginning of the year when the project was practically ready and approved, we submitted an offer to the governor of the city in order to change the site of the building from Ismoil Somon's proposal and place the building a little bit closer to the lake so that we can minimize the number of trees affected by the construction. Mahmadsayid Ubaidulloevich has adequately dealt with our offer and has signed the additional decision to move the building site so that deforestation can be reduced by 2-2.5 times and the green strip along the walkway can be preserved. Some trees, certainly, had to be cut down, though the majority of them were not in the best condition. However the project includes a solid sum for planting several dozen trees, which will essentially increase the number of trees in this zone. Also many bushes will be planted, lawns created, and the landscape will be created; thus gardening in this territory will be much better than it was before the construction of the hotel. In this sense the place should become even more beautiful. We do not plan to partition off the beach area, and thus the townspeople will be able to come and relax on the lake's beach.

During the presentation at the beginning of construction it was declared, that the lake will be shared with the city. What is meant by "shared"?

It was presumed that the investor and the city administration will improve the condition of the lake in order to increase its appeal. So far the question of sharing has not been worked out. We agree closely to consider this project and we already have an offer to improve the island that has settled down between our site and the Kohi Borbad complex.

In any hotel, certainly, there is a health center. Near the lake there is a physical health center (FOK). Is the investor planning to undertake reconstruction of this complex?

Currently we are not planning this, as it is a big sports complex. The hotel business does not need a very big sports complex. We plan to construct a large enough health center where fitness equipment will be placed, as well as a pool, a sauna, and a fitness-club will be constructed. Hotel guests as well as any other interested parties can take advantage of the health center.

For more information on Tajikistan, visit BISNIS online at http://www.bisnis.doc.gov/bisnis/country/tajikistan.cfm

BISNIS (www.bisnis.doc.gov) is part of the U.S. Commercial Service (www.export.gov).