The "Triumf" Hotel causing headaches for the Public Corporation for the Administration of the State"s Assets (RA-APPS)

The Triumf Hotel of Bucharest is again at the heart of a new scandal at the "Public Corporation for the Administration of the State"s Assets" (RA-APPS), after the failed privatization attempt of 2007.

At the time, the Triumf hotel - a historical monument sitting on a plot of land with a surface of 14,987 sqm, located in the center of Bucharest, on the Kiseleff avenue - was put up for auction by RA-APPS, with bidding starting at 32.5 million Euros.

The sale was cancelled by RA-APPS, after one of the bidders was disqualified for failing to meet the requirements of the presentation file, which was one of the minimum conditions of the auction. What"s more, RA-APPS was sued by another company which claimed RA-APPS prevented it from participating in the auction.

However, this time it is not the sale of the hotel which is the issue, but rather an internal conflict between the management and the employees of the hotel, with the latter arguing that the former are planning to "covertly" lay off all the employees of the hotel.

The leader of the unionists SRP Triumf, Gigi Cătănoiu, said: "The management is trying to do a furtive mass layoff, by letting employees go one by one. So far 27 employees out of the total 320 have received the two weeks notice, and 54 more employees will be laid off in two stages. We are against this decision because it is not the result of a careful analysis. It"s not normal to leave a 98-room hotel with only four chamber maids out of eight".

Gigi Cătănoiu also says that as 25% percent of the employees of the hotel are about to be laid off, the activity of the hotel could be brought to a standstill: "If we take into account the fact that over the last 20 years no investments in the hotel were made, the occupancy rate is low, and the current state of things, the future of the hotel is uncertain".

The union leader said that the employees of the hotel will challenge the decision of the managers at the Territorial Labor Inspectorate and they could hire a lawyer to bring a lawsuit.

• RA-APPS: The Triumf hotel is not for sale for now

There are rumors among employees that the difficulties of the hotel will worsen this year, and its losses could increase four times, over 2009, which could cause RA-APPS to try and sell it off again.

However, when contacted by BURSA, the general manager of RA-APPS, Georgian Surdu, said that there are no plans to sell the Triumf hotel this year: "Our priority is to sell those buildings that are causing us trouble, for which it is no longer justifiable to continue funding them. We are 100% positive that we won"t sell off the Triumf hotel this year. However, later down the road, I couldn"t tell you what"s going to happen".

Concerning the SRT Triumf scandal, Georgian Surdu said that the reorganization is up to the management of that branch of RA-APPS, and said that other branches of the RA-APPS which are overstaffed will take similar actions.

Valer Şanta, the head of the SRT Triumf branch of the RA-APPS, reaffirmed that the Triumf hotel won"t be put up for sale: "As long as I am in charge, the Triumf hotel won"t be sold off, nor will it change its line of business".

• The management says the layoffs are done purely for economic reasons

Concerning the internal problems of the division of the RA-APPS which manages the hotel and those of the hotel itself, Valer Şanta explained that those difficulties have been caused by difficult economic conditions: "At the Triumf hotel things are very bad. Last year"s economic occupancy rate was 15-18%, and in January 2010 it was only 8%. It is for purely economic reasons that the layoffs were decided, since this will affect 27 employees and I want to emphasize that we are not planning to do any additional layoffs. There was no alternative other than to cut wages for all employees".

The leader of SRT Triumf added that additional money will be invested in the coming period and said that if things improve, some of the people that were laid off would be called back to work: "Our goal for the near future is to increase the occupancy rate to 25-30% and to successfully cover our wage expenses. We are also planning to invest in improving and advertising the hotel, since no investments were made in the last 20 years. If the situation improves, we will bring back some of the employees that were laid off, but if it doesn"t, we will unfortunately be forced to continue with the layoffs".

When asked whether the management was pressured to privatize the hotel, Valer Şanta denied this allegation.