Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Moscow to Get New 5-Star Hotel

The owners of the Savoy Hotel have announced plans to raise $50 million to build a five-star hotel in central Moscow on a site already leased from the Moscow government.

Sergei Skobkin, president of Infa-Otel, a joint venture between Finnair and Intourist which owns the Savoy Hotel, said his company is trying to raise $50 million for the first stage of the project.

Skobkin said that Infa-Otel has signed a 49-year lease for a site on the Rostovskaya Naberezhnaya across the Moscow River from the Radisson-Slavjanskaya Hotel. The exact rent for the land is still being negotiated.

The hotel is to be called the Grand, after the prerevolutionary Grand-Hotel, which was demolished to build the Moscow hotel in 1932 in Manezh Square. Architects Meerson & Partners have done a design for a 150-suite hotel in the style of an 18th-century palace.

Skobkin said that rooms will cost from $350 to $1, 700 a day. "Our hotel will not be meant for tourists. It will be meant for business people. The main things for them are respectability, solidity and comfort", Skobkin said.

Skobkin said that while Moscow had enough high-turnover budget class hotels, there was still demand for another five-star hotel.

He said that research by the Moscow government on the hotel business showed that Moscow needed 60, 000 suites for foreign tourists and 200, 000 suits for Russian travelers.

He said that Infa-Otel's deluxe Savoy Hotel in the center of town was operating at a profit with an annual turnover of $11 million.

Infa-Otel itself plans to invest $5 million in the project, mostly in the form of a loan but with $500, 000 in equity. Skobkin said that the Intourist holding company, now a fully private entity, had also committed $2 million in debt and equity.

Skobkin expects another $24. 5 million from the Turkish construction company Alarko, which is at present constructing a new Turkish Embassy on the Rostovskaya Naberezhnaya and will construct the new hotel.

He said the Infa-Otel was holding talks on obtaining another $18 million in investment from the U. S. firm Fuller International Development Ltd. and the Finnish Jouko Salonen Terasto Oy.

If Infa-Otel raises the money, Skobkin plans to have the hotel finished by 1996. There are also plans to turn an apartment house to the left of the hotel into a business center, and build an underground garage for Muscovites in the park nearby.

Infa-Otel was the first joint venture in the Soviet Union, set up Jan. 7, 1987 seven days before the decree on joint ventures was published.

Few other major hotel construction projects are now under way in Moscow. The German firm Advanta Management recently won a tender competition run by the Moscow government for a major reconstruction of the Moskva Hotel on Manezh Square.

Many former state hotels, including the giant Cosmos and the Minsk, have recently privatized. Both have announced plans for substantial remodeling and said they were looking for investors.