There is a growing sense of confidence that 2011 will prove to be a steady to good year for business in Russia, according to a recent survey by DT Global Business Consulting. That said, despite sales getting back to 2008 levels for some companies, most executives agree and accept that the glory days of easy money in 2007-08 have probably gone forever. Russia stands out as the fastest growth market in the CEE region above Turkey and Poland.
When asked what their mediumt-erm CEE priority markets are (executives could select three): 80% of regional managers chose Russia; 50% selected Poland; and 37% picked Turkey. Ukraine, Romania and Czech Republic followed. When asked in which markets they expect to hire staff in 2011, the responses were: 67% Russia; 41% Poland; 35% Turkey; and 30% Ukraine.
The report also concluded that while the construction industry along with real estate was savaged in 2009, by the end of 2010 there were the first reports of recovery to sustained levels of 4-9% growth.
Michael O’Hare, Managing Director of Horwath HTL Russia & Hungary, specialists in these markets echoed an increasingly positive outlook “The first quarter of 2011 has proven to be interesting as investors seek to revisit projects that have been dormant over the last few years in addition to exploring new opportunities in the hotel sector - this is a clear sign that confidence has returned to the market - however, the real catalyst for development growth will be banking institutions willingness to lend to this sector.”
The Russia and CIS Hotel investment conference taking place in Moscow in October, will bring together investors, developers and operators specifically interested in these regions to examine the current state of the markets, identify the hotspots for growth and provide solutions for raising finance for new and current projects.
With the approach of the Winter Olympics in Sochi 2014 projects are on the move with several deals from Interstate and Hilton underway at last year’s Russia and CIS Hotel Investment Conference. IFK Hotel Management, as an official representative of Golden Tulip Hospitality Group in Russia and The Rosa Khutor Ski Resort Development Company, have also just signed a management agreement for two newly-built hotels located in Krasnaya Polyana village, close to Sochi – the host city.
Tulip Inn Rosa Khutor is scheduled to open in time for the new ski season in December 2011. This is the first hotel for the Golden Tulip Hospitality Group in the Russian market. Situated in the heart of the resort Golden Tulip Rosa Khutor 4 hotel is also expected to open in 2012. The hotel will provide excellent location for skiers and guests of the Winter Olympics 2014.
Says Philippe Brisbois, IFK Hotel Management CEO “With the signing of the management agreement with The Rosa Khutor Ski Resort Development Company and launching new international brands recognized by millions of travellers worldwide we start a new chapter in the Russian hotel market”.
The Russia and CIS Hotel Investment Conference will take place at the Radisson Royal Hotel, Moscow, 17-19 October 2011. Registration is now open, for further information visit www.russia-cisconference.com.