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Hotel project for gambling business: questions, cases, risks

For more than five years the management company Ribas Hotels Group has been successfully running hotel facilities throughout Ukraine and promptly responds to the market demands. Following the adoption of the law legalizing the gambling business in Ukraine, the company’s top management started to receive requests asking about a chance to set up casinos or arcades in hotels.

Mr. Artur Lupashko, CEO of the company shared peculiarities of the requests coming from market players, information on a new product intended to solve the basic package of difficulties associated with the entry of the gambling business into the halls of Ukrainian hotels and naturally the cases with which his company is working in real-time.

Request 1:

To find a hotel that already has stars and a room meeting the following requirements: that is, at least 300 square meters, with the ability to make a facade entrance which makes it possible for visitors to get directly to a gambling hall and not to the hotel.
Requirements to the hotel: distance to educational institutions and churches should be not less than 500 m and the number of rooms — 25–50 (for a city with a population of more than 10 thousand people or Kyiv). If the goal is to place a full-fledged casino, the number of rooms should reach 100–150.
We can easily meet this request as we are active participants and experts in the hospitality market. Hoteliers know us, trust us. So, it is easier for us to find the right hotel and communicate with an owner or with a decision-­maker.
I’d like to note that we are already helping three operators to find locations.
There is another “but” — one can find very few such hospitality facilities in our country, less than a hundred. And not all of them are in places meeting the requirements. Besides, for some reason, some owners are not ready to host slot machines or casinos.

Request 2:
To find a hotel that can be reorganized into a hotel with required premises and which can get stars.
Right away I share the case that illustrates how we work with such a request.

CASE 1 : We were contacted by representatives of the gambling business from Kyiv. We found an object for them. But it lacks four rooms to have 25 and to get the required stars. And it lacks premises for a gambling hall. But there is a food store on the ground floor which can be converted into a casino.

Our role: within the frame of our competencies we studied the hotel.
We found all the discrepancies with the category “3 stars” and offered several solutions to effectively eliminate them. It can be done by dividing rooms and placing another coffee bar on the -1 floor, arranging one more entrance to convert the hotel into an inclusive one and making it possible to accommodate disabled people.
We made necessary calculations, showed them in technical specifications, in layout plans, and calculated reorganization costs of its construction part.
We agreed with certification companies and directly with the members of commissions. We received a clear answer that if we put in life the abovementioned we will get stars.
We made calculations for “players” as to how much the reorganization will cost all the way.
Having received a green light from them, we help to organize all business processes.
Before our expertise representatives of the gambling business would not consider this object as a platform for organizing their goals since it did not meet the requirements.
After our examination, it remains only to fulfill the recommendations offered by us and one can start a gambling hall or casino.

CASE 2: There is a building that has not and never had a hotel. It could be a working or unfinished business center, an operating shopping center, a dwelling house, or its part.

Request 3:

It is necessary to organize in the building a hotel with the entire infrastructure to get the required stars and to allocate premises for a gambling hall.
Here our role is more ambitious — we have to redesign the building. That is, we have to create a hotel in the place of a working real estate object. And do it in such a way that with minimum investments to create a hotel which for sure will obtain 3 stars and will be profitable. At the same time, it is necessary to allocate a required area for gambling (300–500–1000 sq. m depending on the needs of an operator) to enable an operator to organize his activities.

Proposal born by demand

We have developed and launched the Play franchise — a network of hospitality facilities with slot machines inside three-star hotels with a uniform standard of service quality.
The product contains checklists with effective planning solutions, recommendations concerning equipment, materials and instructions for use. This algorithm is designed so that everything you need can be set up and put into operation as cheaply and quickly as possible until decisions have become morally or technically unsuitable. And, certainly, to make a profit as soon as possible.

The franchise is relevant in two cases:

  • if redevelopment is required (when we convert a building into a hotel) and we can fully use all the design and configuration solutions in a new hotel;
  • if a hotel is working and an operator gives this hotel to a management company for further operation. To include this hotel into the Play chain allows to differentiate it from many other hotels.

The project has already been launched in Kherson. Two more agreements were signed in Kyiv. At the same time, we are negotiating with building owners and gambling business representatives in Kherson, Zhytomyr and Lviv.
For objects which for various reasons cannot be included in Play, we offer a comprehensive management service or ready to help to properly organize the work and transfer to a manager or lease them. Beforehand, at the request of an owner, we properly organize all the operating activities to maximize the value of an object.
There are quite tangible risks for representatives of the gambling business without our expertise. Here are just some of the mistakes which can be made by a player when he is busy simultaneously with his trade and hotel business. He can get a hotel that becomes obsolete immediately after its opening: it wears out quickly and in one to two years becomes a burden to his business as a whole.
Our recommendation to representatives of the gambling business is to contact professional hotel companies. One of these companies is Ribas Hotels Group.
A professional team experienced in such renovations in the sphere of HoReCa will help to:
• competently organize a redevelopment (if necessary);
• implement reconstruction or small repairs in an existing hotel to achieve the desired result with “little blood”: to obtain the category “3 stars”, to ensure the hotel profitable work, to find the most suitable premises for the needs of the gambling business.
There are suitable premises within the chain of our hotels that we can rent. Ribas Hotels Group today is one of the fastest-­growing chains in Ukraine. Accordingly, new hotels are regularly added to the stock. They also have premises that we can immediately optimize for the gambling business.
Besides, today we are building 5 objects: 1 in Ternopil, 2 in Lviv, 2 in Kyiv. At the very design stage, we have the opportunity to provide options for those players who, in the long term prospects, are looking for premises for casinos or slot machines. We are ready for negotiations and within a two-year term, we can launch a hotel for them.

Premises for rent or a project from scratch?

It is better to find a hotel already categorized with stars and a good room for required targets — a casino or an arcade since obtaining a certificate and a “three stars” category is a long and expensive process. New requirements will be adopted within a year, and they may be a bit different compared with today’s version. Nevertheless, most hotels that exist today do not meet the requirements of the State Standard of Ukraine. And it will be rather difficult to get cherished three stars without some renovations.

What should operators be rather afraid of?

They should be afraid of those who are not professionals but pretend to be them. The scale of professionalism should be determined by the projects and hotels which are already being developed by the hotel company.
I’d like to note that we are proud of our “scale of professionalism”. The hotels under our management are freely available on our website. Anyone can find their ranking on the website booking.com. If desired, we can provide an opportunity to communicate with the owners of these objects and get feedback concerning cooperation.
We offer our clients a strong shoulder of a proven market leader and a guaranteed result.

Ribas Hotels Group
www.ribashotels.com

Odesa office
Ukraine, Odesa, Gagarin Ave., 25
+38 (048) 706-47-36

Lviv office
Ukraine, Lviv, street D. Danilishina, 6
+38 (050) 133-83-27