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Analysis & Opinion
15.02.10 Unforgettable Hospitality
By Svetlana Kononova

Are you rich? Do you like adrenaline highs? Would you like to experience something you’ve never done before? Then enjoy special service “Russian style.” Welcome to the overpriced Moscow hotel. A recent survey by the Hogg Robinson Group, an international corporate travel service company, found that Moscow hotels are the priciest in the world, while Russia’s capital has been rated the most expensive city for the fifth consecutive year.

At present an average hotel room in Moscow will cost about $415 a night, down $60 from the rate back in 2008. The second most expensive destination is Abu Dhabi, with an average price of $350 a night, the researchers at the Hogg Robinson Group found. In New York City, the third most expensive place to stay, rates fell by 23 percent from $414 to $319 in 2009. In comparison, London’s hotels seem to be quite affordable, with an average room price of $150 per night.

However, Russian experts question the hypothesis that Moscow is truly the most expensive destination in the world. “Data from the Hogg Robinson Group is controversial,” said Ilya Kapustin, the head of the Prohotel Web portal, “probably because not all of the hotels partook in this survey.” Kapustin believes that the recent data from the Hotel Price Index is more accurate. The index shows that in 2009, the average price of a room in Moscow dropped by 36 percent to $267. But even taking this data into consideration, Moscow hotels are twice as expensive as those in Belfast, Ireland, and three times more expensive than in Las Vegas, California.

Many travelers, both foreign and non-foreign, find Moscow to be an unwelcoming place for tourists. So why are hotel prices here so exorbitant? The answer is obvious: demand is still outnumbering supply. There are only about 270 hotels in the Russian capital that are able to accommodate 85,000 tourists – a very limited number compared to London, for example, where some 1,700 hotels are available to travelers, or Paris, which boasts 1,500 hotels. “The average room rates in Moscow are higher than in many European capitals due to several factors,” said Helen Gorbunova, the regional PR director for Eastern Europe and communications manager at the Baltschug Kempinski hotel in Moscow. “Firstly, demand exceeds supply in all hospitality segments, including luxury five-star hotels. Despite the continuous expansion of all leading international hotel operators in Moscow, five-star hotel service is still in high demand. The market is still growing and developing, but not as much as it used to before the economic crisis.”

The second factor contributing to the high price of a room is the choice of contractors that supply all the things hotels need, from food and drinks to decorating materials and furniture. Moscow hoteliers prefer foreigner suppliers, which factors in to the cost of the room, Gorbunova explained.

The number of tourists who came to Moscow last year dropped by 20 percent compared to 2008, hoteliers claim. “We did not change our prices in rubles, but rooms became cheaper in euros due to the exchange rate,” Gorbunova said. “We try to come up with special offers for our clients, and more than 90 percent of the rooms at the Baltschug Kempinski hotel are booked on weekdays.” Most visitors who stay in luxury five-star hotels in Moscow travel to Russia on business. These expensive venues are especially popular with guests from the United States and Western European countries, such as the UK, Germany and France. Only a quarter of all the bookings are made by travelers from other Russian cities.

While service at the five-star hotels in Moscow owned by the international chains usually meets high standards, finding moderately priced accommodation in the city is like playing Russian roulette – the experience may end up being positive, but the chances of it turning your trip into a nightmare are still high. Americans and Europeans visiting Moscow often complain about rude personnel, a lack of information in English and extra charges for services such as using the Internet or calling a taxi. “A throwback to the Cold War, Communist Russia and all of the dark wood old-fashioned furniture, ingrained tobacco smells, and austere staff you could possibly anticipate in this day and age. I could recommend this hotel only to those who want to know what it felt like to be in Russia in the 1980s,” wrote a traveler from the UK about his experience of staying at an expensive hotel in the center of Moscow.

A review of another four-star hotel in Moscow, where the average room costs $194 per night, written by a tourist from Ireland, sounds even more dramatic: “When we arrived, a very rude receptionist greeted us. The staff were unhelpful and very rude. I can honestly say that I had never encountered this level of ignorance before. The presence of prostitutes in the lobby was very unsettling.” “The hotel is very proud of its security system, but the matter is as unpleasant as could be: three ‘gorillas’ stand before the elevator hall and request your room card. You have to ask permission to bring guests to your room. Many sheets with information for guests can be found in the room, but everything is written in Russian. The staff are as unfriendly as you can get; nobody there has heard about client service or hospitality, nobody speaks English,” reads a review of a three-star hotel with an average room price of $158 a night.

When second-class hotels are often uncomfortable and overpriced, what alternatives are available to travelers who simply cannot afford five-star luxury? “Mini-hotels are a good solution,” said Kapustin. “For example, this kind of accommodation is quite common in St. Petersburg. There are many mini-hotels with a total room capacity of about 8,000 in the city.”

The second alternative is short-term apartment rental. As a rule apartments are much cheaper than the average hotel and the quality of the accommodation is the same or better. The average apartment rate varies from $70 to $200 per night, and several people can share. However, this option is used mostly by Russian travelers and not by foreigners. “Although we provide extra services such as airport transfer, interpretation and excursions, foreign tourist never contact us directly,” said an employee of the Moscow Apartment Service who asked not to be named. “Some travel agencies that usually book hotels for foreigners offer our apartments as an alternative, and this is the only way we can get foreign clients.” But while the representative supposed that foreigners do not contact the agency directly because they are afraid of fraud, she did not pay much attention to the fact that agency’s Web site hasn’t even been translated into English.
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