Resort Hopes to Mix Business and Pleasure

Kempinski Hotel Group and builder Energogarant Capital-Stroi are planning to create a lakeside resort in the Moscow region, hoping to lure business travelers and vacationers to stay in rooms starting at 550 euros ($860) per night.

Straddling the markets for flashy vacations and high-end business conference venues, the Kempinski Hotel Beriozki will feature spa centers and a marina, along with conference facilities and a shopping area. But the trick, analysts say, will be selling its location, 11 kilometers north of the Moscow Ring Road.

The complex, intended to accommodate as many as 600 guests, may also have difficulty staying booked throughout the year. "There is a very serious risk because this market has not been tested," said Marina Usenko, associate director of hotels at Jones Lang LaSalle.

In the Moscow region, "all suburban hotels are of a more moderate size," Usenko said. "Kempinski will be one of the pioneers in this respect."

Set to be completed in 2011, the complex will be on a 21.6-hectare property, previously home to the Soviet-era Beryozki sanatorium, along the Klyazminskoye Lake, said Gianni van Daalen, Kempinksi's vice president for Eastern Europe and Russia. No financial details of the development were released.

Kempinksi's planned resort, however, will only share a view with its predecessor. Luxury rooms will cost as much as 5,000 euros per night for one of the two presidential suites, and standalone apartments, situated near the 100-yacht marina, will be available for around 10,000 euros per month.

The majority of the land will be divided into plots for around 40, two-story villas, which will be sold as year-round residences.

And although Kempinski is emphasizing the resort aspect, vacationers will provide only a portion of the project's revenue.

Since Moscow is much more of a business destination than a tourist center, many central hotels are booked from Tuesday through Thursday and are only lightly occupied on the weekends.

"Central Moscow hotels are about 85 percent booked during the week and only 20 percent booked on the weekends. That averages to about 70 percent overall. We plan on Beriozki surpassing that," van Daalen said.

The conference center will draw business travelers during the week, he said, and the weekend will be booked with vacationers. The hotel's location could pose a problem, however.

Van Daalen brushed off such reservations, saying, "Beriozki is practically in the center, if you don't leave at the wrong time," referring to Moscow's horrible traffic.

Usenko said the marina and spa were "unique features" that are usable year-round, as opposed to golf courses, which are buried in snow during Moscow's long winters. And the high prices may not be such an obstacle, she said.

"This is a matter of convenience. Even today there are suburban resorts that could cost more than flying to Turkey — including the flight, but they still have customers."