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. Last Updated: 07/27/2016

5-Star Upstart Takes Low-Rate Strategy

The five-star Golden Ring Swiss Diamond hotel will throw open its doors Friday hoping to give its upper-market competitors a run for their money.

The hotel, owned by the presidential administration and operated by a Swiss company, is offering rates significantly lower than the four other five-star hotels in town. Singles will start at $265, an average of $50 less than the Baltschug-Kempinsky Hotel Moscau, Metropol, National and Marriott Grand Hotel.

And as part of its promotion campaign, the hotel is slashing room prices for the rest of the year, said Heinz Chytil, general manager of the hotel. Singles will go for $160.

"I believe it means tougher competition in the market," said Galina Ryltsova, manager of Arthur Andersen's audit department for hotels.

Ryltsova added that lower prices may help the hotel on Smolenskaya Ploshchad find its niche among the city's luxurious hotels.

Reconstruction started on the 23-story hotel four years ago when the presidential affairs department's Golden Ring Complex signed a contract with Swiss construction firm Mabetex. With a $60 million 10-year loan from Swiss banks backed by the Russian government, the former Belgrad-1 underwent a complete refurbishment.

Golden Ring, which owns other properties including the Arbat hotel and a trade center, has hired Mabetex subsidiary Swiss Diamond Hotels to manage Golden Ring Swiss Diamond.

Mikhail Sorkin, general director for Golden Ring, said Monday that the hotel, which is targeting business clientele, has high hopes for success despite the current financial crisis.

"We believe that even in this difficult time we will be able to attract enough visitors," he said. Hotel experts said that in addition to its competitiveprices, the venture has good chances for survival because the economic crisis has not dramatically affected the industry.

Although some high class hotels have seen occupancy fall from the normal 70 percent to 80 percent down to 60 percent to 65 percent, many others are still housing the same number of guests, they said.

The Golden Ring Swiss Diamond hotel rises to 80 meters and offers 240 rooms, including two presidential suits priced at $1,250, two restaurants, including the Panorama on the 23rd floor, and a casino. Guests will also have access to a health center, a business center with a conference room, underground parking and a travel agency.

Mabetex, founded eight years ago, is involved in more than 80 projects throughout Russia including renovation works in the White House. In addition to construction and hotel management, Mabetex runs a travel agency, an airline and a fashion company.