Hilton plans to develop regional network of economy-class hotels in Russia

Speaking at a discussion session, The Hospitality Sector: Will there ever be a ‘Triumph Hour for the Three-Star Hotel category, organized within the frameworks of the CRE Summit-2009, Vladimir Ilyichev, Hilton Hotels’ director for operations development in Russia and CIS, noted that Hilton Corp. is interested in developing an extensive regional network of low-price category hotels in Russia. “Here, I’m speaking about 10-15 three-star hotels in different Russian cities. We understand that this niche is not filled, while the demand for low-cost accommodation is very high in Russia,” he noted.

Ilyichev also noted that the realization of such projects is currently hamstrung by the difficulties in finding developers ready to offer attractive conditions for Hilton Hotels, the world's largest hotel operator. “This is despite the fact some European banks are ready to bankroll such projects today,” he added. 

Hilton Hotels’ director sees the main reasons behind the deficit of three-star category of hotels in Russia in expensiveness of land plots and developers’ poor understanding of how the low-cost hospitality business works. “The popular notion that three-star hotels are financially inefficient is totally wrong, because in reality the returns on investment in inexpensive hotels are much higher than those from luxury-category properties.”