View From Within: Okhotnik: A Hotel Within a Multifunctional Complex

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The purpose of the project, the realization of which begun in February 2007, was to raise the profitability of the commercial real estate premises by increasing the total area to more than 7,000 sq.m. Of which 4,000 sq.m would be used for a class B business center and 3,000 sq.m for a hotel. To increase profitability it was necessary to use the potential of the location, raise the efficiency of the management, and lower the market risks as a result of diversification as much as possible. Reconstruction of the hotel was completed in February 2008, and work on the business center is planned to finish in the autumn of this year. Rosokhotrybolovsoyuz, the owner of the building has acted as the investor. Development of the concept of reconstruction, consulting support, putting the hotel into operation and further management of the hotel was and is being carried out by Avant Group.

The facade of the building has been restored; after reconstruction the basements now house the restaurant of the hotel, a laundry and administrative premises; the number of rooms has increased from 84 to 104; the ventilation system has been replaced, the analog automatic telephone exchange has been replaced with a modern digital one; there is Internet connection; the fire alarm system, and also the plumbing and sanitation systems have been replaced; new lifts have been installed.

In zoning the premises the main complexity was presented by the fact that the building already existed and could not be extended. It was necessary to add modern infrastructure to the premises, which prior to the reconstruction of the hotel was absent. But the accommodation of infrastructural premises on any number of floors of the building would lead to a reduction in the number of rooms in the hotel. Therefore the restaurant and laundry were placed in the basement.

According to existing standards a VIP floor was also arranged. This is on the 8th, top floor where there are only rooms with raised comfort of various categories: junior suite, lux and presidential suites.

Hote Okhotnik is in the north of Moscow, on Golovinskoye shosse. The nearest metro station is Vodny Stadium, which is 2 minutes walk away. It is a little more than 30 minutes from Sheremetyevo-2 airport and about 50 minutes (without traffic jams) from Domodedovo and Vnukovo airports. It is 30-35 minutes walk away from the center of Moscow and 20 minutes in a minibus from Crocus Expo Center (which it promises to provide when the business center is functioning). In the opinion of experts, its location is presents restrictions in terms of its remoteness from the center and its close proximity to an industrial zone. The advantages are its proximity to a metro station and good traffic intersections. And also good visibility.

What’s in the rooms

Okhotnik is positioned in the market as a 3* business hotel. The area of the hotel is 3,000 sq.m. Over the eight floors of the hotel there are 104 rooms, 95 of which are standard, five are junior suites, three are luxury suites and there is one presidential suite. The standard rooms measure 15 sq.m and are single or double. In the double rooms there are either two single beds or a double bed, a desk, a phone, satellite TV, wireless Internet connection (Wi-Fi), and a mini-bar. In the bathroom there is a hair drier, and a set of hygienic accessories. It is possible to rent a dressing gown and purchase disposable slippers. There are non-smoking rooms. The junior suites (15 sq.m) are also single or double. They are distinct from the standard rooms by way of additional equipment. They either have two single beds or one king size bed, a desk, a phone, a television receiver, satellite TV, Wi-Fi, a mini-bar, an individual electronic safe and a DVD-system. The bathrooms have a shower cabin, a hair drier, a larger selection of hygienic accessories, two dressing gowns and slippers. The luxury suites are 30-33 sq.m, and like the other rooms can be single or double.

Luxury rooms have individual lay out and configuration of the bathrooms. Luxury suites have a kingsize bed and in addition to that available in a junior suite there is a dining table in the room and a bidet in the bathroom. An additional place for a child up to 12 years is possible. The presidential suite has 3 rooms measuring a total of 78 sq.m and consisting of a bedroom, office, and lounge with a cloak room, bathroom and guest bathroom. In the bedroom is a king size bed, a wardrobe, a guest zone with upholstered furniture, a DVD-system, a mini-bar, and television receiver. In the bathroom there is a Jacuzzi bath, a bidet, a hair drier, slippers, robes, etc. In the office there is a desk and armchairs. The lounge has a larger table, a sofa, and a coffee table. It is equipped with a complete home cinema system including a DVD player, TV, and music center and has Wi-Fi and a mini-bar.

26 million rubles were invested in equipping and furnishing the rooms. The standard numbers have furnishings made by Russian manufacturers, the junior suites by Italian manufacturers and the luxury and presidential suites by Italian and Spanish manufacturers.

The marketing team of the investment department at Rossiisky Kredit bank notes that according to the application of the management company most of the expenditures were on replacing the engineering networks and equipping the rooms in order for the number of technical emergency risks in the future to be reduced.

Services

Lodgers at the hotel can take advantage of additional services such as:

- secure parking;

- 24-hour room service;

- left-luggage office;

- safes;

- Wi-Fi;

- long-distance and international communication;

- taxi service;

- foreign exchange bureau

- ATM;

- copy machine, fax service;

- laundry;

- business services for the holding of seminars and training.

At the reception of the hotel it is possible to receive fax or email correspondence. There is a 10-seat meeting room. Cleaning is carried out by regular employees according to accepted technologies with the use of modern and professional chemicals and products. The building is managed by a professional building management company, and servicing (the replacement of light bulbs, small repairs, etc.) is carried out by the hotel’s technical staff. There is regular security. In the three months of the hotel operating the hotel has on average been 70-75 per cent full. During exhibitions this has increased to 98-100 per cent, and on holidays has been 30-50 per cent full.

The introduced management system of the premises has allowed for a reduction in the structure of expenditures on servicing the rooms by more than 15 per cent. As a result of the realization of the project, the cost of a hotel room has increased by more than 4.5 times in comparison to before reconstruction.

A view from outside

Andrei Bushin, general director of MIEL Commercial Real Estate, considers the idea of using one area to create a hotel and business center as interesting: "Such an overlapping will be demanded, including by companies that have international or national cooperation." He thinks that the Okhotnik hotel corresponds to the declared class, despite its location. Golovinskoy shosse is not an area for tourists, therefore the premise has been positioned as a business hotel, and here the allocation of stars in the standard sense is not paramount. "For business hotels, to a greater degree Internet-telephony and other services of communication, and the presence of conference halls or meeting rooms, i.e. conditions for work, are more important," specifies Bushin. Roman Sokov, director of the consulting department at Becar Realty Group, notes that the hotel is convenient for business-tourists as it is located in immediate proximity from Crocus Expo exhibition center and near a metro station. Michael Feldman, director of development at Azimut Hotels agrees. As for the rooms, in Sokov’s opinion, they are smaller than normal. For example, the luxury suite in Okhotnik are 30-33 sq.m whereas under the standards of Rosturizm they should be no less than 35 sq.m. Standard rooms are 15 sq.m, and according to ГОСТу they should be no less than 25 sq.m. According to Olga Shirokova, director of the consulting, analytics and research department at Blackwood, the requirements of international operators (for example, Hilton) in relation to the area of a standard room in a 3* hotel is 24 sq.m (including the room and bathroom), but for Russian operaters 18-20 sq.m is quite reasonable. The marketing team of the investment department at Rossiisky Kredit bank considers that the areas of the rooms have no principle bearing on the category of a hotel. But in general 15 sq.m for a standard double room is a minimum, anything smaller and the guest would feel uncomfortable. Shirokova thinks that having a presidential suite in this category of hotel is acceptable if it offers something exclusive with excellent specific characteristics, a long list of additional services and exclusive design, but in this case there are not enough advantages. And Feldman considers that a presidential suite in a 3* hotel is not necessary, and that it is better to be guided by three classes of rooms: standard, junior suite and luxury suite.

"According to world standards the number of luxury rooms should be 3-5 per cent of the total number of rooms, he specifies. It would be worth making one room an executive suite and the rest as standard rooms as this would be more economically effective, advises Irina Zharova-Wright, president of Sesegar investment group. Experts have no issue with the pricing policy of the hotel. According to Sokov, the rooms are cosy, and the price corresponds to the quality. Zharova-Wright agrees that the price of the rooms in Okhotnik are comprehensible for a hotel without a brand and a name with a little-known operating company. "The deficit of hotel rooms allows for the appropriate price and category to be established," she notes. "The current average price to stay in a 3* hotel with breakfast is 3,960-9,100 rubles per night, including 18 per cent VAT," says Shirokova. For comparison: at the Hotel Budapesht it costs 5,700-12,680 rubles per night, at the Hotel Varshava Hotel it costs 3,950-6,950 rubles, and at Izmailovo it costs 3,475-11,300 rubles. However Feldman thinks that to discuss the competitiveness of prices is currently impossible. Premises which are opening now are more profitable than future projects. "In Moscow there is a deficit of 3* hotels, therefore even at high prices the hotel will be in demand," he is sure.