When Moscow’s first Western five-star hotels, such as the Radisson SAS Slavyanskaya and the Baltschug Kempinski, opened in the early nineties, they were some of the most high-profile and symbolic indicators of the new social order and the sudden increase in opportunities that capitalism brought to Russia. They epitomised the glamour, luxury and affluence that so many Russians aspired to after the drabness and austerity of the late Soviet period.
However, like many of the benefits of the new system, they never made it much further than the capital and St Petersburg, Russia’s tourist-friendly and culture-rich second city. Although there are another ten cities in the Russian Federation with populations of over a million, none of them had an international-standard four- or five-star hotel until 2007.
In the past, few foreign travellers had needed to go further than Moscow, St Petersburg or their immediate environs. But while most of Russia’s wealth still winds up in Moscow – or London – the past eight years of oil-fuelled economic growth have had at least some trickle-down effect, with major industrial centres such as Perm, Yekaterinburg and Nizhny Novgorod enjoying unprecedented prosperity. Those cities are now beginning in many respects to resemble the Moscow of a decade ago, with the same modern shopping malls, luxury car dealerships and high-end restaurants popping up.
They are also inevitably attracting an ever-greater number of business travellers, both foreign and Russian, looking for reliable, well-equipped accommodation. The big international hoteliers have taken note, and the past couple of years have seen a slew of expansion schemes announced by Rezidor, Kempinski and Hilton among others. Provided the current crisis doesn’t derail their plans, the major cities of western Russia will at last be able to offer visitors a comfortable bed for the night and the facilities necessary to do business.
There’s no question they are needed. The comparatively few travellers who have spent much time in Russia’s provinces will have been struck by one of the most remarkable achievements of the Soviet Union – consistency. It’s a peculiar accomplishment to have spread identical mediocrity across 11 time zones, but the Soviets managed it.
From Kaliningrad to Kamchatka, visitors are used to finding the same squalid accommodation inside the same rundown buildings, in one of the three Soviet architectural styles. The same lumpy furniture and depressing wallpaper, the same plastic wall radios tuned to stations that no longer exist, the same yellow water in the shower, and even the same terrifying concierges on every floor to ensure you surrender your room key every time you go out. The restaurant will serve mayonnaise-rich salads and watery reconstituted meat, while the leisure facilities will be restricted to a sauna, which more likely than not will double as a brothel.
There are many honourable exceptions that have been set up by local entrepreneurs in the past few years, but finding them can be tricky, especially if you don’t speak Russian. Price is no guideline – the type of dire hotel described could cost anywhere from £15 to £150 per night, and a clean, modern, privately-run hotel is likely to cost about the same. Guidebooks cannot afford to send their writers on regular fact-finding missions to Russia and there are few dependable incoming travel companies covering the country.
Dmitry Makaroy, of moscow-hotels.net, a web-based company serving foreign travellers to Moscow and St Petersburg, says: “We’ve long wanted to offer our customers accommodation in other Russian cities, but we don’t have the resources to find suitable hotels over such a big area. We need international brands to reassure our customers and give us reliable partners to work with.”
So what’s promised for the next few years? Rezidor is ahead of the pack. When the Radisson SAS Slavyanskaya opened in 1991, it was the first new-build five-star hotel in Moscow, and it made Rezidor (then SAS International Hotels) the first big foreign chain to break into the former Soviet Union. It was also the first to open a hotel outside of Moscow and St Petersburg with the Radisson SAS Lazurnaya Peak Hotel in Sochi in 1994. This was followed by the second Radisson SAS Lazurnaya Hotel on Sochi’s beachfront, giving the chain more than 300 rooms in the city and a major lead over competitors in the preparations for the 2014 Winter Olympics.
More recently, in April last year, the company achieved another first when it launched the Radisson SAS Don Hotel in Rostov-on-Don, a leafy provincial centre that has been one of Russia’s most important trading posts for centuries. The 81-room hotel will be joined in Rostov in 2011 by the Radisson SAS Grand Hotel. Other cities bookmarked for Radissons over the next couple of years are Kaliningrad late this year, Chelyabinsk and Tyumen in mid-2010, and even perhaps Khanti-Mansisysk, the tiny capital of the oil-rich Khanty-Mansi Autonomous Okrug.
Plans for the group’s Park Inn brand, which offers deluxe accommodation primarily for business travellers, are even more extensive. Last year saw the opening of the Park Inn Sadu in Moscow and the Park Inn Izhevsk. Others are due to open in Volgograd next year and Kaliningrad in 2011.
According to Darren Blanchard, Rezidor’s director of business development in Moscow, the eventual plan is to get a Radisson into every Russian city with a population of more than half a million, and Park Inns into every economically vibrant city with over 250,000. It’s a hugely ambitious project that would give the company a presence in more than 75 Russian towns and put it far ahead of its rivals.
The other pioneer in the Russian market, Kempinski, opened the Hotel Baltschug Kempinski Moscow in 1992, restoring one of the city’s most beautiful grand hotels. After managing St Petersburg’s Grand Hotel Europe in the nineties, it found a more permanent home in the Northern capital at the supremely elegant Kempinski Hotel Moika 22 in 2005. Its next steps in Russia include opening another hotel in Moscow in 2011, a resort complex just outside the capital, the first international five-star hotel in Novosibirsk, the “capital of Siberia”, and a property in Sochi before the Winter Olympics.
First up is the Kempinski Plaza Nizhny Novgorod, scheduled to open in 2011. Russia’s fourth-largest city was one of the Soviet Union’s industrial powerhouses, home to the Gorky Automobile Factory, and major armaments factories that kept the city completely closed to foreigners. The city’s revival of its heavy industry and major investment in a burgeoning IT field have made it one of the key business destinations in western Russia. It’s also one of the most colourful and characterful cities in the regions.
Unlike Kempinski’s Moscow and St Petersburg hotels, this property will be housed in an ultra-modern building designed by Russian-born German architect Sergei Tchoban. His design incorporates features from the crenellated walls of medieval Russian fortifications and the multifaceted surfaces of the onion domes on old Russian churches into a sleek, undulating riverside structure that will contain 250 rooms, extensive meeting space, a business centre, shopping mall and 111 luxury serviced apartments. It’s no exaggeration to say that the building will be one of the most exciting pieces of contemporary architecture in the country.
While other hotel chains may have come to Russia a little later, they are now doing all they can to catch up. Hyatt’s Ararat Park property was quickly acclaimed Moscow’s finest luxury hotel after it opened in 2003, and the chain’s second Russian property, the Hyatt Regency Ekaterinburg, is nearing completion. Again, this will be the first upmarket Western hotel in this major industrial and administrative centre in the Urals. The chain also has four more hotels inked in, with the Grand Hyatt Moscow opening next year.
Hilton, which opened its first Moscow hotel, the Hilton Leningradskaya hotel, only last summer, has announced plans to open 70 more over the next decade. In September it launched the first of its mid-range Hilton Garden Inn hotels in the country. The Hilton Garden Inn Perm serves one of Russia’s major manufacturing centres, the most Eastern city in European Russia, and a vital junction on the Trans-Siberian Railroad. Until the hotel was opened, the city had only 600 hotel rooms for a population of more than 900,000.
It’s mid-range brands such as these that are most attractive to Russian developers, who see the potential for marketing them to the growing numbers of internal business travellers likely to make up the backbone of revenues in provincial Russia for the foreseeable future. Intercontinental Hotels Group, which manages more rooms than any other company in Moscow, with six Holiday Inns and a Crowne Plaza, launched the Holiday Inn Samara two years ago and has signed deals for hotels in Novosibirsk, Rostov-on-Don and Chelyabinsk.
Of course, all these expansive deals were signed before the global financial crisis hit Russia. The country’s emerging cities are likely to bear the brunt, the construction industry is frozen almost everywhere, and debit financing – which came mostly from Western banks – is drying up. Many of these loudly hailed projects are therefore likely to suffer delays.
At Rezidor, however, Darren Blanchard is sanguine. “The demand will still be there and construction costs have dropped, so in many ways it’s the ideal time to build new hotels,” he says.