Those who decide to build hotels in small Russian cities will have to take off and throw away rose-colored glasses. Only after that it will be possible to understand in which places it really makes sense to open hotels, where to take money for their construction and why the concept of “co-life” is so important for a hotel
According to Marina Starchikova, co-owner and inspirer of the restaurant and hotel holding WeFamilyGroup, most businessmen have a desire to do good deeds, it’s just that not everyone understands what kind of good deed is his. Therefore, if we call the restoration of historical buildings mentioned in the first part of the material and their involvement in commercial turnover or tourist promotion of small towns through the construction of modern hotels there good deeds, we need to popularize them as much as possible — to get the topic from the depths of entrepreneurial and public consciousness and discuss it as often as possible and in more detail.
Although, of course, rose-colored glasses will have to be not only removed, but also thrown away: there are enough issues related to the construction and operation of hotels in cities that are not distinguished by either over-ambitious economic activity or large-scale tourist flow.
Marina Smirnova, Partner, Head of the Tourism and Hospitality Department at CMWP
“Depending on the type of city, the problems are different, but mainly seasonality. If the city is oriented towards beaches and the sea, then the season lasts two to three months a year, then the children go to school, the parents go to work. The city is emptying, and small hotels do not have the means to create infrastructure for year-round use. For industrial cities, the problem of seasonality is not so acute, but there is also a small volume of demand: several thousand people are sent to enterprises in small towns per year. At the same time, the same people drive, and often the plant either has its own hotel or rents apartments for business travelers from the center. And for all small towns, the problem is the choice of a site, a shortage of sites and buildings suitable for hotels. To a greater extent, buildings are needed, of course: it is not always advisable to build from scratch for 20-30 rooms. But there are very few vacant buildings in good condition and in good locations, and their prices are not competitive with the hotel format. So, five or six years ago, to start a hotel business somewhere on the Volga (in the village of Reshma, for example) it cost like an apartment in Moscow. That is, by selling the capital’s housing, it was really possible to start a business in the format of a guest house. Now, I think it is already more difficult to do this: real estate (with the potential to generate investment income) in tourist destinations is about 30% more expensive than residential real estate of a comparable format. Here you can only try to guess the direction of the future tourist boom in order to have time to enter a low market before the start of real estate price growth under the influence of tourist demand. And the personnel is the “pain” of the entire tourism industry. In small towns, this problem is very acute: if the residents of the city are not the target audience of hotels, then the picture is reversed with the staff — every investor would like to recruit local residents so as not to incur the costs of recruiting and dormitories. But this is not always possible.”
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Alexander Gendelsman, Managing Partner of ZONT Hotel Group
“The most difficult thing is to guess the number of rooms, because sometimes a small resort town needs a large hotel in order to get the maximum revenue in high season and, as a result, calmly go through the low season. Well, good architecture and design should not be a feature: stop building the wrong damn thing. New Russian hotels must be correct in terms of operational ergonomics and stylish in terms of design and architecture, regardless of the size of the city in which they are being built.”
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Andrey Shemyakin, Managing Partner of SEACompany
“In most cases, hotels in small towns are built with a small number of rooms (due to fears of low occupancy, as well as problems with a shortage of staff needed to work in an average or large hotel). Most of these hotels reflect the flavor of the place where they are located. Almost everyone is trying to promote local cuisine and has “farm” specialties. This formula is not new, most European hotels in small towns are built on this principle. The only thing that cannot be called a single standard is the observance of the visual cultural code of the city during the construction of the facility. Well, for starters, not every city has such a code. And secondly, the construction economy often grows a lot if you need to use certain materials or limit the height of the building.”
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Marina Starchikova, co-owner of the restaurant and hotel holding company WeFamilyGroup
“Before making a decision on the construction of a new hotel in a small town, first of all you need to assess the tourist attractiveness of the destination itself — that is, why come here, what to see if there are iconic places of power. It is also important to take into account the attitude of government representatives towards the city, to what extent the region as a whole is interested in developing a particular territory, investing public money and making it more attractive not only for tourists, but also for the citizens themselves. If the authorities are active, then business activity is also increasing, and a competitive environment is being formed. But if there is no synergy between the state, business and local residents, then it is better not to open hotels in such cities. And if you have already decided to open, you need to grow hotels like children: independent of you and your desire today or the sudden unwillingness to continue investing in them tomorrow. Each object should be independent, it should be created in such a way that it at least provides itself, and even better, that it gives others opportunities for development. And another very important topic: for the hotel, its infrastructure, and its staff, there should be no division between local residents and visitors to the city. The hotel area should and can become not a stain cut out of the urban fabric, but a favorite vacation spot for citizens — we have proved this by our own example. I think the modern trend is hotel spaces that are interesting to everyone, in which there is a real “co-life”.
Another topic that needs to be discussed is financial assistance from the state to hotel builders in small towns. According to Marina Starchikova, “everything is very small here, everything is very small, everything needs to be done at the craft level.” So do such “artisans” need help, and if so, what kind?
Now there is no special surge of investor interest in such hotels, Andrey Shemyakin emphasizes once again. “For the most part, they are built without investments from outside or at the expense of loans from the bank. However, if there is a large city-forming enterprise in the city, then often it or its owner becomes an investor. It is always motivated by selfish motives: you want to eat delicious food yourself, but you can’t get to Moscow every day, and you also need to settle respected partners somewhere, and even so that you don’t feel ashamed. As for banking products, they are the same and, in general, with the exception of agricultural areas, they do not differ in a large and small city,” the expert says.
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According to his observations, most hoteliers from small towns want only one thing: the tourist flow — more stable, understandable and from wide segments. “It is often very expensive and sometimes impossible to provide it on our own, at least due to the lack of a developed transport infrastructure. Therefore, they are waiting for the main help not even for themselves, but for their city: first, so that it becomes attractive to tourists, and secondly, so that everyone knows about it. And if there is a flow, then all other issues are always secondary,” Andrey Shemyakin is sure.
“With the current key rate, it is almost impossible to build a hotel without using support measures. Only medium and large facilities are supported at the federal level. But there are many support measures at the level of the federal subject and through SMEs. And here we return to the role of regional authorities, which, again, can and should provide such support measures and widely inform local business circles about this,” Alexander Gendelsman believes.
Gerasimov Hotel in Michurinsk. Photo: Valeria Mozganova/BFM.ru
And not only to inform, but also to make procedures (including procedures for obtaining loans) more accessible and understandable, Marina Starchikova is sure. According to her, now not only are the rates prohibitive, but a small novice entrepreneur simply does not have the opportunity to collect the necessary documents.
By the way, all hoteliers “vote” for the revision of the rules of the 141-th government decree and the expansion of preferential loans so that it covers small hotels, and not only hotels from 120 rooms, as now, adds Marina Smirnova. “A good help would be a municipal lease, when the city rents out buildings suitable for these purposes for hotels at preferential rates. In Moscow in 2019, we believed that the cost of such a lease should not exceed 12 thousand rubles per square meter per year. Despite the fact that an average hostel needs 350-450 square meters, and for a small hotel with 20-25 rooms — 600-700 square meters,” the expert says.
Another option to support the tourism and investment promotion of small towns is to create their own development agencies, and at the same time include them in the work of a new structure that is just emerging in Russia — the tourist event directorate. But about this, as well as about the architects’ view of the prospects and possibilities of small towns, in the final part of the material.
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