Hostel will fit into Moscow’s most expensive street

Managing hostels is quite a profitable business that contributes to tourism development and improves city’s image. For one, hostels help to get rid of a stereotype of Moscow being an expensive city, which attracts only wealthy travelers – everyone can afford accommodation for 400-900 roubles (€10-20) per night.

Yesterday Moscow Tourism Committee in cooperation with recently established nonprofit partnership “Hostels Union” presented to the press budget accommodation options in Moscow and then held a press-conference at Interfax. According to the union’s chairman Mr. Ivan Ksenofontov the concept of hostel appeared in Germany over 100 years ago. The idea implies providing basic accommodation services at a very low price. On average a night at an American hostel costs $10-20, in Europe – same amount in Euro. Hostels are in great demand in Australia and New Zealand, where they make up 15% of hotel beds. In Russia the price ranges from 400 to 900 roubles per night, besides they have fallen in the last two years. Before the recession an average price stood at around €20 per night, but after the recession the competition in the sector grew tougher and the rent went down. Consequently all that led to cheaper hostel nights. Most of the guests are modest youngsters, families with children and school groups for which such 4-9-bed rooms are perfect.

Surprisingly half of the hostel guests are foreigners. One of the movers of the Hostels Union and its Board member Mr. Daniel Mishin told RATA-news that possibility of budget accommodation within the city center even attracts overseas participants of Intourmarket and MITT travel trade fairs. No wonder that English language is a mandatory requirement for all hostel staff.

According to Mr. Mishin first Russian hostels appeared six years ago and today they can be found in 18 cities. There are 45 hostels with 2300 beds in Moscow and 52 hostels with 2800 beds in Saint Petersburg. This kind of budget accommodation is also available in Veliky Novgorod, Sochi, Suzdal’, Yekaterinburg, Irkutsk, Ulan-Ude and some other cities.

Hostels Union data show that 9 hostels have been opened in Moscow in 2009 and another 14 in 2010. General Director of “Your Hotel” Managing Company Mr. Gennady Ustinov revealed that by the end of this year a big hostel with 120 beds would have been opened in Stoleshnikov side-street. It will occupy the entire floor of 800 square meters historic building, and the customers will be using the separate entrance from Petrovsky Boulevard.

All the press-conference speakers gave accent to seasonality which they consider the main problem for hostels development. In summer there is not enough beds, in winter there is hardly any guests. According to the Moscow Tourism Committee Chairman Mr. Sergey Shpilko there are way too many stereotypes interfering with the development of this business. “Many people think that all hostels are located on the outskirts of the city. While in Moscow most of them are within the center – in Kitay-Gorod area and around Stoleshnikov side-street. Others believe that hostels offer low quality services, but that is not true. Another myth says that the prices are higher than in Europe. Some see hostels as a place for bums and migrant workers, and that has nothing to do with reality as well”.

Moscow Tourism Committee asked the city districts authorities to allocate buildings for hostels, as for now only Zelenograd responded. Mr. Shpilko reckons that the most challenging thing in hostel business is its lawfulness. “Hostel is hard to register as a collective accommodation facility as there is no such definition in both Civil and Housing Codes. Sanitary and fire safety regulations for hotels are not good for hostels” – says Mr. Shpilko. Moscow Tourism Committee intends to work in close collaboration with Hostels Union in promoting this kind of accommodation.