Guiding Lines: Moscow’s Sequel to Hailey’s “Hotel”

The Dreamer

A popular holiday and business travel destination, Moscow suffers an acute shortage of hotels of all categories, especially moderately-priced economy class properties. The city needs at least twenty 3-star hotels. In order not to reinvent the wheel the city hall decided to begin with construction of eight new projects on the sites of Soviet-era buildings Altai, Vostok, Zolotoi Kolos, Baikal and several other properties raised in the 1950s.

Turist (Tourist) Hotel was the first site designated for redevelopment into an inexpensive accommodation facility on the basis of the house design series Yubileiny, developed by the Moscow Research Institute for Experimental Design Typology (MNIITEP) and housing construction company DSK1 ahead of the 40th anniversary of the company.

Moscow mayor Yuri Luzhkov himself praised the project during inspection of the first Yubileiny property raised on the territory of the Krasnaya Presnya plant for production of ferroconcrete items.

The house is different from all other standard housing projects such as P-44T, P-3M or KOPE. Built using prefabricated construction technologies, Yubileiny projects are cheaper and less time-consuming. At a recent session of the city’s town-planning council officials said that a property providing 300 to 400 rooms could be raised in six to eight months, while the cost of internal decoration would not exceed $300 per room.

The hotel is designed by MNIITEP. Admittedly, the cost of development of such a hotel remains unknown as the project budget has yet to be drawn up. But proceeding from the average cost of 1sqm in Europe’s 3-star hotels, estimated at $800 to $1,000, the cost of the 25-storied Yubileny development may stand at some $20 million (excluding the price of land beneath the property and access to the city infrastructure).

The city hall’s program is based on the calculation of economic efficiency of the project. A project to refurbish Turist Hotel envisaging construction of additional stories and annexes with a view to increase the number of rooms from 554 to 714 would cost $9.5 million and pay back in 5 years. In case of dismantling the old development to vacate a site for new construction the number of rooms may be increased to 2,129; but then the project would cost approximately $114 million and pay back only in a decade. Annual tax revenues from an economy class property are estimated at $60 to $120 per 1sqm.

Even if only eight projects are finalized as soon as by 2010 the city’s stock of hotel rooms will reach 9,250 units providing accommodation for 1.2 million travelers. Today, the city budget receives $50 from one tourist staying at a Moscow hotel for three days, which means only $60 million per year.

Prefabricated construction technologies have long been adopted by hotel developers. A hotel for Formula One guests in France is built using plastic panels. But even in Moscow, as early as in the run-up to the 1980 Olympic Games, residential projects were raised instead of hotels; Minsk Hotel, for example, was built from blocks.

Quoting Curtis O’Keefe, owner of the O’Keefe chain, in Arthur Hailey’s 1695 novel Hotel: "You can sum up in three words, what the public expects nowadays from a hotel: an 'efficient, economic package.' But we can only provide it if we have effective cost accounting of every move-our guests' and our own; an efficient plant; and above all a minimum wage bill, which means automation, eliminating people and old-style hospitality wherever possible.

"Let's carry things a shade further. In my organization I've had a blueprint developed for the future. Some might call it a vision, I suppose, though it's more an informed projection of what hotels... are going to be like a few years ahead. The first thing we'll have simplified is Reception, where checking in will take a few seconds at the most. The majority of our people will arrive directly from air terminals by helicopter, so a main reception point will be a private roof heliport. Secondarily there'll be lower-floor receiving points where cars and limousines can drive directly in, eliminating transfer to a lobby, the way we do it now. At all these places there'll be a kind of instant sorting office, masterminded by an IBM brain…

"Guests with reservations will have been sent a keycoded card. They'll insert it in a frame and immediately be on their way by individual escalator section to a room which may have been cleared for use only seconds earlier. If a room isn't ready-and it'll happen just as it does now-well have small portable way stations. These will be cubicles with a couple of chairs, wash basin and space for baggage, just enough to freshen up after a journey and give some privacy right away. People can come and go, as they do with a regular room…

"For those driving their own cars there'll be parallel arrangements, with coded, moving lights to guide them into personal parking stalls, from where other individual escalators will take them directly to their rooms. In all cases we'll curtail baggage handling, using high-speed sorters and conveyors, and baggage will be routed into rooms, actually arriving ahead of the guests. Similarly, all other services will have automated room delivery systems-valet, beverages, food, florist, drugstore, newsstand; even the final bill can be received and paid by room conveyor.”

The Critic

But there are still many reasons for doubt. To begin with, the program to build a chain of 3-star hotels was penned years ago. The first decree to the effect was issued in 1997 (No.53-PM, Jan 22). Secondly, the Yubileiny design has proved unpopular with housing builders. So far, only two 14-storied projects, on Khoroshevskoye Highway, were built to the design. Especially in terms of costs, the series was considered to be more appropriate for construction of more expensive business-class residential compounds rather than for standard apartment blocks.

Finally, Moscow’s panel housing technologies, as such, are hard to modernize, while standard floor plans are extremely difficult to change. The city hall demands that government-run construction companies yield 5 million sqm annually; DSK1 in particular is required to build approximately 1 million sqm, or 80 apartments per day. The quality of construction is doubtful. Besides, will it be possible for developers of Yubileny houses to come up with properties that meet all standards adopted for 3-star hotels in Europe? Those are the reception zones, additional halls and rooms measuring at least 60sqm. Surprisingly, the city hall is set to build economy class hotels in line with the municipal building rules and regulations which have long become outdated.

The question as to where to find investors for those projects also remains unanswered. It is hard to believe that they will be financed from the municipal budget. Eight Yubileiny hotels will require at least $200 million, cost of land and communication lines excluded. Admittedly, Moscow no longer has full control over Turist, Altai, Budapest and Kuzminki that were once municipally-owned. Many sites have been acquired by private owners and that is why the city hall is looking for other sites to test Yubileiny.

The Realist

And still, the Yubileiny series has its advantages. Such projects provide open-air parking facilities, high ceilings, large bay spacing, partially open floor plans and panel frames instead of solid walls, which may be used in double hotel rooms. DSK1 is set to produce components for 25 such projects annually. All the government needs to do is help investors and assume the cost of construction of communication lines on allotted sites, and speed up the issue of permissions for construction.

Investors attach importance to clear-cut guiding lines, low cost of joining the project, reasonable cost of construction of 1sqm of space, a payback in less than a decade, ideally in five years, and an average room rate of $100 per day. If those requirements are met hotels built in accordance with European standards in commuter areas of the capital may prove successful. But then, it still remains unclear who will run those ferroconcrete hotel properties.