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. Last Updated: 07/27/2016

City to Enforce Ban on Offices in Hotel Rooms

Moscow officials said Tuesday that starting in 1997 they plan to begin enforcing a new ban on the use of hotel rooms as commercial offices unless they are registered with the city government.


City authorities say the measure was issued for safety and technical reasons, but some analysts say it also may be an effort to nab tax evaders and companies that try to operate without registering as businesses.


"Hotel managers will need to register officially their commercial activity of renting rooms as offices if they want to do it legally," said Alexander Vakhovski of GAO Moskva, a municipal firm that manages city assets, including its stakes in various major hotels.


Vakhovski said the resolution, signed Sept. 25 by Mayor Yury Luzhkov, will affect "the majority of hotels" in Moscow, but not business complexes like the one in the Radisson-Slavjanskaya hotel.


The resolution applies to hotels that rent rooms to companies for more than two months, said Alexei Anastasiev of GAO Moskva's hotel department.


He said the city adopted the rule because of "fire security" and "technical" concerns, including the use of copying machines and high-wattage equipment for which hotel rooms are not usually designed.


"Hotels are for temporary residence, not for permanent residence," he said.


Some analysts said the rule appeared to be an effort to force more companies to register for tax purposes, and to help ensure that there will be a solid market for major office projects under construction in the city.


"It's part of the general supervision of economic activity and tax payments," said a Moscow-based international property consultant, who did not want to be identified. "Supervising tax payments is probably the big reason."


Anastasiev conceded that it will "not be easy to verify whether hotels respect the rule," which probably will require close checks of guest registrations.


He said it probably will take about a month for a hotel to get official permission to rent rooms as offices, but he did not specify conditions or what fees the city might charge.


Several hotel managers contacted Tuesday said they did not anticipate problems with the new rule.


"It's not a tragedy for us," said Vladimir Bogatkin, general director of the President Hotel. "We are renting rooms [as offices] to only two or three companies. So if we have to apply that rule, it won't mean a big loss for us."


"I heard about that resolution, but I am not going to worry about it until I get it from the city government itself," said Vladimir Mironov, head of the Sport Hotel.