Flannagan’s is one of the most popular Sofia venues, in the heart of the city right across from the Parliament building.  So says the blurb on one of the websites dedicated to pubs, bars, clubs and restaurants in the capital. Indeed the Irish pub’s central location makes it ideal for meetings at any time, helping to transform it into one of Sofia’s key landmarks.

This could soon change, however. Flannagan’s looks set to disappear, to be replaced by a luxury French restaurant. This is just one of the changes expected to begin next year at the Radisson SAS Grand Hotel which is also home to Flannagan’s.

Full renovation
Two to three years ago Henry Gwyn-Jones, who bought the Sofia Radisson building in March 2003 via his UK-based company Gort Securities, announced plans for large-scale investment in the hotel managed by the international Radisson chain. This included renovation of the building as well as new hotel rooms and venues and a fresh vision.

Although the project has been delayed it now has every chance of becoming reality, according to Fernando Grunberg Stern, general manager of the hotel since May 2006. A new architect and interior designer have already been chosen for the task and the first steps towards renovating hotel rooms have been taken.

The main part of the renovation is expected to start at the beginning of 2010 and will last until the middle of 2011. The hotel will not close over this period, Stern said. Plans include a change of furniture in the hotel rooms and the lobby bar. The building will be expanded with five new suites and 40 hotel rooms added to the list. A new facade will also be put in place as well as the change to the restaurant.

"All Sofia restaurants look alike. They are good and pleasant but are still missing what can only be offered at high-class restaurants. The new Radisson restaurant will be a luxury French brasserie," Stern said. The planned investment totals about 10 million euro. The fact that renovation talks have surfaced again suggests that the funds, or at least some of them, have already been secured.

Crisis context
The planned renovation coincides with the economic crisis which has seriously affected all hotels in Sofia, including the five-star category. The most pertinent question is how renovations, estimated to cost millions of euro, can take place at a time of acute economic crisis.

On one side revenues are falling and are far below levels two years ago. "2007 was a fantastic year in terms of revenue. It was the best year ever for business. We started feeling the crisis in 2008 and this continues to date. We have lost between 12 and 15 per cent of our occupancy rate compared to a year ago. Middle price ranges also started to drop as clients became more sensitive towards prices offered. We had to revise our rates to meet clients’ expectations which meant that we lowered prices by about 15 per cent," Stern said.

Radisson Sofia’s owner and management felt they could not postpone renovations much longer. The most recent renovation took place in 2001 and a hotel needs to be renovated every eight-to 10 years. Or so it says in tourism manuals. This applies even more to hotels from the high-class category as this is the only way it could remain on the surface and be able to compete with other players in a class already described as well saturated.

"If you had asked me two years ago I would have told you that we need new super luxury hotels here as well as more four-star hotels. Back then phones were ringing all the time with requests for bookings. We constantly had to say ‘no’. It was very difficult to tell clients that they could not come to us. Today it is very easy for clients to come to us. Now they can find rooms available all the time," Stern said. That’s why the hotel’s renovation efforts sound logical. Particularly since competition will keep growing.  

Kapital weekly, Issue 43