Moscow lags high de­mand

The Weekend Australian - Review - - Prime Space - Oc­cu­pancy

WHEN the Ritz- Carl­ton Moscow threw open its neo- im­pe­rial doors near the Krem­lin this week, the cheap­est room for the sum­mer tourist sea­son was $ US1036 ($ 1190) with tax. That rate re­flects how Moscow ho­tel open­ings are lag­ging be­hind room de­mand fu­elled by soar­ing tourism, ex­ports and in­vestor in­ter­est in the world’s largest en­ergy pro­ducer.

‘‘ I can’t spend more than $ US200 a night, so I ended up a 15- minute bus ride be­yond the south­ern end of a sub­way line,’’ says Peter Beck, Korea di­rec­tor for In­ter­na­tional Cri­sis Group, af­ter ar­riv­ing from Seoul.

‘‘ When a Rus­sian looked at the ad­dress of my ho­tel, he said, ‘ Don’t go out at night’.’’

Lit­tle re­lief is in sight for busi­ness trav­ellers. While the num­ber of vis­i­tors to Moscow hit 3.8 mil­lion last year, up from 300,000 in 1991, wreck­ing crews have de­mol­ished four Soviet- era ho­tels in the past five years, wiping out 5000 ho­tel rooms within a 10- minute walk of Red Square.

Moscow, Europe’s most pop­u­lous city, has 70,000 ho­tel rooms, lit­tle more than it had a cen­tury ago dur­ing the reign of Tsar Ni­cholas II, ac­cord­ing to Iosif Ordzhonikidze, deputy mayor for in­ter­na­tional re­la­tions.

To at­tack the short­age, the city Gov­ern­ment is re­view­ing projects that would more than dou­ble avail­able ho­tel rooms to 180,000 by 2010, when Moscow ex­pects five mil­lion vis­i­tors.

The projects in­clude a $ US700 mil­lion, 210- room Four Sea­sons next to the Krem­lin, as well as ho­tels pro­posed by In­terCon­ti­nen­tal Ho­tels Group, Novo­tel and Sof­i­tel, two units of France’s Ac­cor SA.

‘‘ Ev­ery three days, we are go­ing to open a ho­tel,’’ Ordzhonikidze says, adding that ho­tel open­ings will peak at 190 in 2009. ‘‘ Tourists can­not stay in rooms at $ US500 a night.’’

Ho­tel in­dus­try an­a­lysts are scep­ti­cal Moscow will cut red tape fast enough to spark a ho­tel boom.

In 2003, city of­fi­cials promised to dou­ble the num­ber of ho­tel rooms in Moscow to 130,000 by 2005.

In­stead, ho­tel ex­pan­sion barely kept up with de­mo­li­tion. The Ritz- Carl­ton, a $ 350 mil­lion project, opened three months late.

‘‘ If you com­pare what they have said and what they have done, there is a big dis­crep­ancy,’’ says Stephane Meyrat, an as­so­ci­ate di­rec­tor for hos­pi­tal­ity at Col­liers In­ter­na­tional. ‘‘ It takes too much time and money to get all the sig­na­tures.’’

For now, for­eign vis­i­tors re­sort to plan­ning far ahead, keep­ing their vis­its short and stay­ing greater dis­tances from the city cen­tre. Close to the Krem­lin, ho­tel bills hit four fig­ures for a sin­gle night.

‘‘ The room goes for $ US700 to $ US800, then they get you on the ex­tras — $ US35 a day for wire­less in­ter­net, $ US40 to $ US50 to de­liver a cheese­burger to your room,’’ Abra­ham Wag­ner, a Los An­ge­les- based lawyer, says af­ter stay­ing at the Savoy Ho­tel Moscow.

The newly ren­o­vated, 67- room down­town ho­tel charges $ US755 for its cheap­est room. That drops to $ US682 for the sum­mer sea­son. Room ser­vice de­liv­ery of a cheese­burger sets a guest back $ US22, ac­cord­ing to the ho­tel.

At the Savoy Ho­tel in Lon­don, un­der dif­fer­ent own­er­ship, the cheap­est room rate on the ho­tel’s web site is $ US339. Wire­less in­ter­net ac­cess is free in the lobby and a room- ser­vice cheese­burger costs $ US37.

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