Moscow plans to build 250 new hotels

A desperate shortage of hotels in Moscow which last year saw 60,000 visitors turned away from the city has prompted one of the Russian capitals most ambitious development projects yet. Over the next five years, authorities hope to build 250 new hotels, trebling the number of guest beds available. 'It's an extremely ambitious plan,' Andrej Kriovshein, president of the Moscow tourist development body GAO to the Expo Real trade fair in Munich. 'We're talking about building more hotels in five years than were built in the entire 20th century.'

But desperate measures, say officials, are the only solution. Visitor numbers hit three million last year and are expected to grow by a further 20 percent this year. In an attempt to attract prompt backing for the project, the government has come up with a series of financial sweeteners. These include lease rates below market level and generous credit options. The level of financial aid on offer has been doubled.

'By offering such generous deals, we merely hope to speed things up and ensure that things get underway as soon as possible,' said Kriovshein. 'It's vital for Moscow that these 250 hotels are completed on time.'

The situation is not unique to Moscow. The deluge of tourists coming to St Petersburg has prompted the city authority to sanction the construction of 135 new hotels. However, Anton Bondi de Antoni, from Vienna-based Bondi Immobilien Consulting, which has completed several projects in Russia, warned first-time investors to be wary. 'I think the hotel market in Russia is for those investors who are already established there,' he said. 'The amounts involved are far too high for those looking to get an initial foothold.'