Stalin Skyscraper Will Morph Into a Hilton

MTA view of the 28-story Leningradskaya Hotel at 21/40 Ulitsa Kalanchevskaya.
Hilton will open its first Russian hotel in a renovated Stalin skyscraper in July.

Mike Collini, Hilton International's vice president of development for Northern Europe, said Thursday that the hotelier would franchise its name to management firm Interstate, which will operate the 275-room, four-star hotel in what is now the Leningradskaya Hotel, one of Moscow's seven Stalin skyscrapers.

"We're delighted to be opening our first hotel in such a landmark property," Collini said.

Built in 1954, the Gothic-style, 28-story Leningradskaya closed for renovation last November as the hotel's owner, Sadko Hotel, sought an international brand to take over operations.

Hilton signed the agreement with Sadko and Interstate to franchise its name Wednesday, Collini said. Sadko is the country's largest hotel owner and controls all three of Moscow's Marriott hotels, which are also managed by Interstate. Restoration of the Leningradskaya is expected to cost $50 million.

Hilton is the last international heavyweight to enter Russia, and it is all but certain to find success in a city with a severe shortage of hotel rooms. "The interiors of the hotel are practically exotic," said Marina Usenko, senior vice president at Jones Lang LaSalle Hotels in Moscow. "There's a certain spirit there. It's almost urban chic." She noted that Hilton's franchise acquisition of the Leningradskaya followed three failed attempts to enter the market.

Stephane Meyrat, associate director at Colliers International, said the hotel would probably ask for $250 to $280 per night, but its proximity to three railway stations was not ideal. The hotel is located near Kazansky, Yaroslavsky and Leningradsky stations. Meyrat also said Hilton probably would have preferred to have secured a management contract, allowing the company to operate the hotel, rather than the franchising contract. "But Hilton has been under pressure to show something," he said.

Collini said Hilton's impetus to move into Russia was prompted by the unification of Hilton Group, which had run the brand's North American hotels, and Hilton International, which oversaw operations in the rest of the world. "It's been the platform for aggressive development plans," he said.

Hilton's further plans for Russia include up to 12 hotels in Moscow, six in St. Petersburg and at least one in every city with more than 300,000 people in the next three to five years, Collini said.

Meyrat said the hotel's opening would boost Moscow's image. But, he added, the city will have to wait for Hilton to build one of its five-star Conrad hotels. As to why the hotelier opted not to open a Conrad at the Leningradskaya, he said: "All that glitters is not gold. The rooms might not be very big, and they'd rather start from tabula rasa."