Monday, 12 May 2008

Hotel prices are in a league of their own

Financial News

Jason Corcoran

12 May 2008

Letter from Moscow

Online networking sites Facebook and Linkedin are helping to reunite many of Moscow’s expatriates with long-lost football-loving friends.

Old comrades and former colleagues, not heard from in almost a decade, have climbed out of the woodwork to e-mail, text and ring to enquire about tickets for the Champions League final on May 21, along with beds or sofas where they might sleep.

The red devils of Manchester United and the true blues of Chelsea have quickly realised that the Moscow trip may smash their budget for all of next season’s away games and the year after too.

Moscow’s tag as Europe’s most expensive city is deserved, if only for the cost of its accommodation. Budget hotels and hostels are thin on the ground in a city that caters more for the well-heeled tourist and business traveller.

With an estimated 42,000 football fans expected in Moscow on match day, beds have been at a premium and all the city’s hotel rooms have been snapped up, in spite of the inflated prices.
Moscow currently has 35,000 hotel rooms in a city with a population of more than 10 million.

By comparison, London, with a population of 7.5 million, has 88,000 hotel rooms, according to figures released last month by corporate services company Hogg Robinson.

Operators are focused on the five-star end of the Russian market and have so far failed to cater for the demand for two- and three-star rooms.

The Hogg Robinson study found that the average cost of a stay in the Russian capital last year was $480 per night; more than $100 higher than the second most expensive city, New York, at $370 per night.

The latest addition to Moscow’s array of five-star hotels is the Hilton Leningradskaya, which has been upgraded from three-star status since its closure and renovation.

Russia’s first Hilton hotel, which is due to open next month, is located in one of Moscow’s famous “Seven Sisters” – imposing skyscrapers built in the early 1950s in the Stalinist gothic style.

Completed in 1954, the 24-storey, 275-room hotel retains its historic exterior but the inside has been completely renovated. Prices have yet to be announced but guests can expect little change from $500 per night for a basic room.

The last hotel opening to cause a splash was the Ritz Carlton, where guests can part with $1,000 for a basic room or $16,000 for the top suite. The Tsar’s breakfast, which comprises Cristal champagne, Beluga caviar and a truffle omelette, can add $700to your daily tab.

The city government has floated a variety of ideas to address the lack of budget hotels in the city but little has materialised.

Part of the problem has been the disappearance of the Soviet-era hotels. The Rossiya, once Europe’s largest budget hotel, offered 3,000 rooms for as little as $60a night.

It was commissioned by former President Nikita Khrushchev, who wanted a hotel big enough to house all delegates to Communist Party congresses and unfriendly enough to subdue them.

However, it was pulled down three years ago to make way for a $1bn multi-functional entertainment complex with 2,000 hotel rooms.

The project looks to be bogged in a legal quagmire after a Moscow court recently nullified a $830m deal involving British architect Sir Norman Foster to redevelop part of the land.

For football fans without a bed, they can do worse than spend the night out on the town. Moscow, more so than New York, is a true 24-hour city where the traffic is non-stop and the bars, restaurants, casinos and malls remain open around the clock. Just don’t forget your wallet.

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