1. December 02, 2010 BUSINESS SUMMIT HOTEL INDUSTRY 2010 Presentation by Gerhard Mitrovits General Manager Hotel Baltschug Kempinski Moscow

2. Subjects Business priorities changed – international hotel manager’s view How do luxury hotels maintain competiveness and leading position Crisis management and underdeveloped markets for Moscow

3. Business priorities changed – international hotel manager’s view Supply of professional and educated labor People management and empowerment 360 degree benchmark Yield management and profit profiling Strategic investments vs. image

4. Business priorities changed – international hotel manager’s view Lack of educated hotel labor will lead to recruitment from outside of the industry with priority of language and attitude Training departments will play an even more important role Without empowerment and career driven people - management the staff shortage could damage business Modern management and strong information flow will allow a positive 360 degree benchmarking / feedback Modern yielding and customer profiling is and will be part of every day’s business

5. How do luxury hotels maintain competiveness and leading position Need of market transparency Successful maintaining RevPar Look for “blue ocean” opportunities Leaders vs. followers Innovation and uniqueness

6. How do luxury hotels maintain competiveness and leading position Distribution systems, twitters and blogs Rate transparency and channel management Little space for individuality Find your own “blue ocean” when entering markets or with rehabilitation programs Lead with innovations

7. How managed five-star hotel market the crisis Occupancy vs. rate Maintain customer loyalty in crisis situation _______________________________________ Niche markets for Moscow Underdeveloped MICE market Tourism strategies vs. increasing inventory Opportunities of underdeveloped markets for Moscow

8. MICE market has the biggest growth opportunity Russia is seen as emerging MICE market Globally 30 bln dollars are spent annually with 50 mln trips International convention center for Moscow? Visit leading fairs – IMEX, CONFEX, IT & ME, EIBTM, CIBTM Incentive market for Russia

9. Conclusion With a growing five-star hotel inventory the quality of hotel employees shall reach international standards, image campaigns and world wide acquisitions should bring this billion dollar market of MICE and incentives to Russia followed by tourists and individual visitors. A better distribution over several market segments will make the market less vulnerable and more stable.