Deputies Balk Over High Cost Of Hotels

State Duma deputies will boycott the Sochi International Investment Forum later this week because of the “unreasonably high” prices local hotels charge, a senior deputy said in an interview Wednesday.
The Federal Anti-Monopoly Service said it suspected that Moscow travel agencies were driving up the prices, while local agencies said many other people were refusing to book rooms when they heard they would cost a small fortune.
“Some hotels in central Sochi have increased their prices by three to four times for the forum, and we do not want to encourage violations of Russian anti-monopoly legislation,” said Yevgeny Fyodorov, chairman of the Duma’s Economic Policy and Entrepreneurship  Committee.
Hotels that charged 7,000 rubles ($230) per night before the forum were asking for 20,000 for the same rooms during the two-day event, which starts Friday, Fyodorov said.
“Besides, we can’t afford spending so much money on business trips during a crisis. So our delegation of about 20 people decided not to go.”
The Sochi forum — Russia’s second biggest business event after the St. Petersburg International Economic Forum — will be addressed by Prime Minister Vladimir Putin on Friday.
Four deputies, including Fyodorov, were listed as participants at round tables as of late Wednesday, but none of them was among the speakers.
“Those of us who decide to go anyway … will stay at our own expense elsewhere, outside the city center,” Fyodorov said, adding that he did not know whether he would go. “I will file a complaint to the Federal Anti-Monopoly Service after the forum.”
The anti-monopoly service has been more active in investigating hotel collusion in recent years, particularly around the time of economic events or big sports contests.
The cheapest room at the Marins Park Hotel, one of the closest to the venue, cost 10,500 rubles, but a booking manager said Wednesday that the hotel was only accepting stays for a minimum of six nights.
Her colleague at the nearby Zhemchuzhina, a three-star hotel with Soviet interiors, said it charged 10,600 rubles per night but that clients had to pay for at least five nights — even if they planned to stay for a shorter period.
Both managers refused to give the pre-forum prices.
“Hotels have to somehow compensate the losses that they suffer because of the forum, and that is why the prices rise at least by 100 percent,” said Natalya Grion Ernandes, chief executive of the Krasnodar-based Mobile-Expo, one of the forum’s official travel agencies. “Hotels stop selling rooms to anyone but the forum participants for the whole week of the event, and there is no guarantee they will all get filled.”
The local administration forces the hotels keep their rooms free for the forum guests, she said.
“Only the most expensive, luxurious hotels have significantly increased their prices for the forum,” she said.
“The deputies could well have stayed in the hotels a 10 to 15 minutes’ drive from the city center and pay as low as 300 rubles to 6,000 rubles a night. The hotels charging that low didn’t raise prices before the forum,” she said. “It seems strange that they tried to go to presidential-class hotels and then complained about how expensive it was.”
The main profits from the forum went to Moscow — not Sochi — businesses, said a manager at Sochi-based travel agency and hotel booking office Lazurny Bereg-Sochi. She asked that her name not be given to speak more openly about the situation.
“A lot of Moscow firms came and booked all the rooms at the hotels and sold them for at least 40 percent higher,” she said.
Mikhail Fedorenko, deputy head of the Federal Anti-Monopoly Service’s department for control of the social sphere and trade, told The Moscow Times that preliminary research had shown that Moscow travel agencies were to blame for the prices. More checks will be held, he said.
The minimum price at a central hotel was 3,400 rubles per night before the forum, soaring to 8,700 during the event, the Lazurny Bereg-Sochi manager said. An average deluxe room costs 20,160 rubles per night later this week, up from 14,560 rubles.
“Those who call us mainly say no because they don’t need such expensive packages for five or six days when the actual forum is just two,” the manager said. “The hotels must have introduced the packages to compensate for the smaller number of tourists coming to Sochi this year.”
Lazurny Bereg-Sochi has seen a 30 percent fall in clients this year.
“It was all dead until the end of July, with people mainly coming to the cheapest rooms just to go lie on the beach,” she said. “It has become a bit more active now, but we’re still seeing a huge difference from last year.”
Regardless, the prices are lower than those charged by hotels a year ago. In June 2008 at a session of St. Petersburg forum, Mirax Group CEO Sergei Polonsky expressed outrage at what he called inflated prices at the local hotels. He stayed with a friend.