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Can Sochi become a premium destination in time for Winter Olympics in Russia?
Opportunities 13 February 2012
During the 2014 Winter Olympics in Sochi a three-star hotel room will cost 110 euros per night and a four-star room 190 euros per night, organizing committee president Dmitry Chernyshenko said Sunday, RIA-Novosti reported. He said these are below-market prices but that investors are "meeting [the government] halfway."
"In principle, these are not market prices — we understand that. But investors are meeting [the government] halfway; these are contractual obligations, and investors already took on these obligations taking into account the fact that the government made very large investments in infrastructure," Chernyshenko said during a meeting of the Sochi coordinating committee with President Dmitry Medvedev.
Chernyshenko's estimate of Sochi reaching a capacity of 41,000 hotel rooms in time for the Winter Olympic games seems rather unrealistic, given that public announcements, in the past three years, of confirmed hotel projects do not exceed a total of 5.000 rooms. By comparison, in 2007, Sochi has only 1,700 high-quality hotel rooms). Among the confirmed five star projects in Sochi (all management agreements with no equity from the chains): Swissôtel Gorky-Gorod (2014), JW Marriott Sochi Golf Resort (2014), Marriott Krasnaya Polyana (2013), Radisson Blu Resort & Congress Sochi (2013), Sheraton Sochi (2013).
Apart from hotels, Sochi currently lacks infrastructure and entertainment. Despite many speculations, none of the major luxury fashion brands present in Russia confirmed plans to open mono-brand stores in Sochi. Louis Vuitton is among the brands which has been rumoured to be scouting for a suitable location in Sochi.
Among the major Russian luxury retailers, Bosco di Ciliegi, which operates several luxury multi-brand fashion and accessories stores in Moscow and the franchises of Corneliani, Moschino, Emporio Armani, Etro, Kenzo, La Perla, Max Mara in Russia is the only to have announced major expansion plans in Sochi. Bosco di Ciliegi's additional interest lies in the fact the company is the general partner of the Russian Olympic Committe.