What's the state of the upmarket hotel sector in Moscow?
Gianni Van Dalen: We have around 1,200-1,300 rooms spread over less than half a dozen hotels that can be described as 'five-star': not many for a city of 12 million inhabitants, and especially not many for the capital of a rapidly developing country... The other difficulty is that there is no official classification yet and we have to refer to our own criteria. But values are sometimes difficult to discern in a city where a three-star hotel often sells for the price of a five-star...
Why aren't the hotel shortages being made up more quickly?
To be honest, it's a bit of a mystery. I think that the 1998 crash gave the image of an economy that is too uncertain, where the financial risks are still too high. What's more, the top-end hotel industry in Moscow faces a problem that it doesn't in London or Paris: filling rooms at weekends. Even if demand remains very strong during the week, the emptiness of the weekend means that occupancy rates do not exceed 70 % over the year. This also explains why rooms in this top-of-the-range sector remain much cheaper, on average, than in Paris or London: hotels make considerable promotional offers to fill their rooms at weekends.
Is the arrival of new top-of-the-range competitors prompting you to change?
Of course. After fifteen years in Moscow, we have decided to embark on a major upgrade that will allow us to look forward with confidence to the arrival of new competitors. The Baltschug Kempinski will become a true five-star luxury hotel, with new furniture, new bathrooms, a high-tech upgrade, a spa and probably a new terrace overlooking the Kremlin, which should become one of the city's most popular reception areas.
