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. Last Updated: 07/27/2016

Interros Opens Its First Hotel

For MTInterros says it invested $30 million in the new Novotel.
Top European hotel chain Accor will make its first foray downtown Thursday with the opening of the Novotel Moscow Center above the Mendeleyevskaya metro station.

The opening of the four-star hotel is also the first venture into the hospitality industry by Interros, the giant holding company that controls Norilsk Nickel, among other companies.

Vladimir Potanin's group invested $35 million in the hotel's construction, according to the company.

Accor — the world's No. 3 chain with an international network that includes Red Roof Inn and Motel 6 in the United States and Ibis, Novotel and Sofitel in Europe — began operating the Novotel at Sheremetyevo Airport 10 years ago.

"Previously, our customers didn't book with us in Moscow unless they needed to be near the airport," said Alexis Delaroff, the hotel's general manager. "The Novotel Center is located downtown, and we will be able to offer our customers a wider range of services."

The 18-story property is next to the Meyerhold complex, which Interros spent $50 million developing. It includes a theatrical center, offices and retail space. City Hall controls the theater and owns 30 percent of the hotel, which Accor operates but has no stake in.

Interros deputy head Sergei Alexashenko said his company expects to recover its investment within five years.

Alexashenko said Interros is studying the three-star market, which he characterized as appealing. If the Novotel performs well, he said, Interros may be interested in participating in a future City Hall project to renovate the giant Rossiya Hotel.

Novotel Moscow Center is the first of two international-standard hotels to open in Moscow this year, the other being the Ararat Park Hyatt, which is due to open in October.

Delaroff said the 16,681-square-meter cylindrical hotel — unlike the square shape of most Novotels — was built before Accor became involved. The architects were Yury Gnedovsky, vice president of the Association of Architects of Russia, Vladilen Krasilnikov and Galina Savchenko.

The advertised price is $190 for a standard room of up to 35 square meters and $230 for executive rooms of 35 to 48 square meters, exclusive of taxes and breakfast. The hotel is offering a introductory rate of $99 plus tax through the end of the month.

Scott Antel, partner in charge of Ernst & Young's hospitality consulting group, said the average per room per night of comparable hotels in Moscow is a little more than $100, excluding taxes, which add another 26 percent. Novotel's special opening rates should therefore keep the hotel busy, he said.

"It's surprising that Accord, a very big brand name, has taken so long to get into the city center," he said. "They are a formidable competitor."

The Novotel Center is likely to serve a niche similar to those occupied by the Marriott Tverskaya, the Radisson Slavyanskaya and the Renaissance hotels, he said.

Yulia Nikulicheva, an analyst at Jones Lang LaSalle, said she expects the hotel to be successful even though it is slightly removed from the city center. "There are already several office buildings around the area and more are under construction. It is people using those offices who are likely to be the hotel's clients, she said.

Delaroff said Accor intends to expand its operations in Moscow, St. Petersburg and the regions, but gave no further details.