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 | | MOSCOW HOTELS NEWS |
| 1 September 2006 |
Moscow Hotels Today
The critical situation that we are facing today, connected with the lack of rooms in Moscow hotels, is largely due to the fact that a number of prominent hotel establishments were closed almost simultaneously. The majority of them, such as the Intourist, Sport, Minsk, Moscow, Rossia and Airostar, belonged to the economy class category, thus, producing a significant deficit in the supply of budget hotel rooms with their shutdown.
The resulting lack of budget hotels brought about a change in the ratio of available and required lodging facilities: while in recent years it was exceptionally difficult to get a hotel room in Moscow during particular activity periods, such as major exhibitions, since the beginning of 2006, with the functioning city hotels completely booked up, finding accommodation has become the worst headache for most visitors to the Russian capital at any time of the year.
One might say that it must have been possible and necessary to forecast this crisis and in a way get prepared for it, if it was seen as inevitable. However, the present steps taken by the Moscow government, including several “rescue” projects, are only capable of soothing the public indignation, rather than producing a quick and painless solution.
Today, the fact remains that the lack of supply causes a keen demand, which, in turn, causes the prices to soar all over the city hotel market. Over the last few months the prices in most central hotels of Moscow were inflated by 200 % on average (the Sputnik, Alpha, Orlyonok, Zolotoe Koltso and other hotels).
Accommodation problems caused by the lack of budget rooms within the price range of 50-60 US dollars per night are continuing to aggravate and are unlikely to be solved in the near future.
There is a quite particular situation in the luxury hotel market as well, embracing the five-star hotels with the shortest payback period. Construction companies seem to be racing one another, with quite a number of new sumptuous hotels being built in full throttle. The overwhelming majority of the available expensive hotels and the new construction sites are concentrated downtown, within a walking distance from one another. These include the Ararat Hyatt, the Metropol, the National, the Ritz and the Four Seasons (both still under construction), and whatever is going to be built on the spot where the Rossia Hotel used to stand.
It is quite clear that in the years to come these hotels will be faced with stiff competition due to a limited number of potential customers, and while the Ararat Park Hyatt and the as yet unfinished Ritz Carlton might feel relatively safe since the high standards of the world-famous hotel chains they belong to guarantee them a share of foreign visitors, the future of the legendary Metropol looks gloomy and uncertain.
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