The global crisis and the Russian hospitality industry
At this time of global financial crisis, Russia is one of the best places to be at the moment in terms of doing business. These are not my words, but the opinions of leading experts that I have come across in several business publications in the media on the volatility on the global equity markets and other crises that the world is passing through today and their negative implications for national economies in different countries and regions. I agree with these experts’ opinions on Russia because I think Russia seems the last place, where global crises are likely to have radical negative impacts on the local economy and the residents’ general standards of living today.
With regard to the possible impacts on the hospitality industry, one cannot compare the more severe degrees of the negative impacts of these crises on the other hospitality markets such as in the United States, continental Europe and Asian countries with those in Russia, whose economy is still comparatively much healthier and the demand for all forms of hospitality services is still at a very high level. This is especially true of internal tourism business, where Russians are still traveling a lot and intensity of the movements between Russian cities remains very high, indeed, much higher than the volume of Russia-bound international travelers.
"One cannot compare the more severe degrees of the negative impacts of these crises on the other hospitality markets such as in the United States, continental Europe and Asian countries with those in Russia, whose economy is still comparatively much healthier and the demand for all forms of hospitality services is still at a very high level."
These trends are evident in our statistics tracking the countries of origin of our guests, where about 55% of our occupancy as a business hotel, a very high rate in Moscow, is accounted for by Russian travelers. This means that Russians are doing more traveling and doing more business internally in the country than foreigners. In this context, if any negative impacts are expected from this crisis, it could be that less foreign travelers — due to the more severe negative impacts of these crises in their home countries — can now afford to travel overseas, including Russia. But, given the statistics that we have, this expected drop in the volume of international traveling will not have a large noticeable impact on the occupancy and other key hospitality services in most Russian hotels.
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