Upscale Hotels On Way Up In Kyiv

KIEV, Ukraine -- Several upscale hotels are scheduled to open in Kyiv within the next couple of years to satisfy the demand created by the increasing numbers of business travelers and tourists coming to the Ukrainian capital.

The Opera Hotel is one of several upscale hotels set to open in Kyiv this year to meet growing demand for quality services from the increasing number of business travelers and tourists coming to the capital.

The market is ripening not only for Ukrainian operators, but international chains, such as Hyatt and Hilton, who have plans to set up shop in the city.

The Opera, a five-star hotel belonging to the Donetsk-based financial and industrial holding System Capital Management (SCM), announced its opening for Dec. 20. At least eight other mostly four and five star hotels are expected to open their doors by 2009, according to Kyiv’s Municipal Economy Department.

Changes in the country’s political and social climate brought about by the Orange Revolution in 2004 are largely responsible for the favorable developments on the Ukrainian hotel market, said Oleg Bolotov, vice president of Premier International, the firm that operates Premier Palace, which calls itself Kyiv’s first five-star hotel.

In addition to Premier Palace, Premier International operates another five hotels in Ukraine, all described as four-star. “The image of the country has changed. It has become more open and attractive to foreigners. Hence, the number of business travelers and tourists has increased,” Bolotov told the Post.

“So have the requirements toward the quantity and quality of hotel services,” he added.

Bolotov said that international hotel operators bank on their brand names and global corporate agreements more than on the quality of their services to ensure their success on the market.

“In order to stay competitive, we plan to launch a new central reservation system, the same as international chains have, to establish cooperation with corporate clients,” Bolotov said.

The arrival of international chains may give upscale customers the greater quality and choice that they seek in hotels in Ukraine, but more doesn’t necessarily mean cheaper, according to Bolotov.

“Prices may be reduced, but I don’t think there will be a price war [between operators],” he said.

“Within the next few years, the growing number of corporate clients will keep the hotels occupied,” he added.

Suite prices in Premier Palace range from $400 to $3,000 a night, and the hotel was filled to about 65 percent of its capacity in 2006, Bolotov said.

SCM is staking its bets on luxury VIP hotel services in Ukraine with the opening of its 140-room Opera hotel in Kyiv, according to Clinton Ribbon, the hotel’s general director.

SCM would not disclose the amount invested into Opera hotel.

According to Kyiv’s Municipal Economy Department, SCM is investing $30 million into the project.

Described by SCM as five-star, the company’s first hotel, the Donbass Palace in Donetsk, was finished in 2004 for $26 million.

SCM is owned by Donetsk multi-billionaire and pro-government lawmaker Rinat Akhmetov.

Opera’s Ribbon said that the success of SCM’s Opera hotel would be an indicator for future investments in Ukraine’s hospitality business.

Ribbon said the country’s luxury hospitality market is still underdeveloped, leaving room for local operators as well as international hotel networks to expand their business.

“Local operators have an opportunity to establish themselves on the same level as big chains, since they can combine international standards with specific domestic experience,” Ribbon said.

According to Ribbon, the main target of five-star hotels is corporate clients, and the Opera considers any hotel offering accommodations to business travelers its competitor.

The first international hotel chain in Kyiv was Radisson SAS, which opened in 2005.

Hyatt Regency Saint Sophia, an investment project of the Donbass Industrial Union, one of Ukraine’s largest business holdings, is scheduled to open in Kyiv in March 2007.

Hilton plans to open a $70 million five-star luxury hotel in Kyiv in 2008.

Source: Kyiv Post

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