Western-style Hotels

Among the 175 hotels presently open in Moscow, no more than 30 offer Western-style accommodation. These properties are distributed among upper-scale class, mid-scale and economy. Most of them are concentrated within the center of the city (Central Administrative District), and the majority falls into the 4 or 5 star category. Currently, the hotels in the highest demand are the small and budget properties.

This segment includes three-star small hotels providing quality service (currently less than 10 percent of the market) and 1–2-star budget hotels. While occupancy rates in three-star hotels are almost the same as in the upper-scale, occupancy rates in the budget category are over 80 percent. Despite the fact that this segment underwent the highest rate of growth in average prices, these hotels remain the most affordable tourist accommodation in Moscow and therefore have no difficulty in reaching close to full occupancy.

Mid-range Soviet-style Hotels

This group consists of Soviet-era three- or four-star hotels (according to Soviet standards, which are significantly lower than in the West) that have independent management. They are mainly concentrated in the North-East Administrative District and in the Central Administrative District.

21. Work in pairs. Ask and answer questions about the Moscow hotel market.

22. Read the interview with Andrew Smirnov, Director of Sales and Marketing, Moscow Marriott Hotel about the main trends in the Moscow hotel industry.

    Interviewer:	Mr Smirnov, could you tell us about the latest trends in Moscow hotels?
    Mr Smirnov:	Three main trends have been recently identified in the Moscow hotel industry: the flexibility of hotels, a change in the pace of booking, and the growing importance of online systems.
    Interviewer:	What exactly do hotels have to do to retain regular clients and attract new ones?
    Mr Smirnov:	Increased competition on the Moscow hospitality market is prompting hotels to be more aggressive and creative. They are now offering more perks: complimentary shuttle service to airports, train stations or business centers; complimentary Wi-Fi; complimentary mini bars; complimentary early check-in and late check-out; separate stations with national cuisine for breakfast; various special offers and discounts for frequent guests. The flexibility of hotels and strong overall demand for accommodation help the Moscow hotel industry show impressive results. The hotels ensure that travelers have an easier and more comfortable stay.
    Interviewer:	What do you mean by the change in the pace of booking?
    Mr Smirnov:	At the moment, we can see a clear trend in which more and more requests for accommodation and conferences are coming at the very last minute, with less than two weeks before arrival. One of the reasons behind this trend is a constant increase in supply, both in hotel rooms and conference facilities. Nevertheless, the hotels’ occupancy level is in no way decreasing; hotels are simply changing their forecasts for booking and adjusting their selling strategies accordingly. Notably, hotels go out of their way to study the booking behavior of different business segments, and they select an optimal business mix for each period, depending on the season, in order to maximize revenues. For seasons that tend to see low demand, hotels seek to attract more bookings in advance in order to ensure a base occupancy.
    Interviewer:	You’ve also mentioned online booking as one of the current trends in the hotel business. In what way can hotels benefit from it?
    Mr Smirnov:	Individual travelers have started using online search engines to make reservations instead of using traditional travel agencies. Similarly, many corporate clients have shifted their travel habits to online engines. By using special promotion codes, corporate clients are able to book preferred rates online. We are seeing a rapid development of online conference services, and hotels are receiving more and more requests for conferences and events through online services.
    Interviewer:	What impact do you think these trends can have on the overall Moscow hotel business?
    Mr Smirnov:	Moscow hotel industry is an integral part of the international hospitality industry. Moscow hotels are gaining more and more international recognition and nominations for outstanding results and excellent service. And from here, we must go forward — take a good look at our processes, listen to our guests, learn from other industries and constantly improve and upgrade our services.

23. Answer the questions.

1. What trends have been recently identified in the Moscow hotel industry?

2. In what way can hotels retain regular clients and attract new ones?

3. What perks are the guests offered in Moscow hotels?

4. What changes have taken place in the booking behavior?

5. In what way do hotels manage to maximize revenues?

6. Why do you think many corporate clients have shifted their travel habits to online engines?

7. What impact do the modern trends have on the overall Moscow hotel business?