Interstate Hotels & Resorts, Arlington, Virginia, announced on Thursday that it was selected to manage six hotels in Sochi, Russia currently under development by NBB-Development, Moscow.
The properties, which will aggregate 1,564 rooms and are expected to open in the fall of 2013, comprise a city center business hotel, a golf resort and four mixed-use resort properties in the Krasnaya Polyana ski town in the Caucasus Mountains near the coastal city.
Sochi, located on the Black Sea in southwestern Russia, will be the site of the 2014 Winter Olympics, with many of the events taking place around Krasnaya Polyana. But Interstate says it is optimistic about the hotels’ long-term potential after the Olympic crowds head home.
“I think the main initiative is to sell it for the Olympic events, but also to redevelop both in-channel tourism in Russia for Russians but also start to develop that external tourism to attract foreigners in the Russian market,” Ken McLaren, executive vice president of international operations, said. “Russia has become the fifth biggest outbound market in the world. Russians, instead of spending money in Russia, tend to travel abroad. Part of the reason for Sochi is to attract Russians back to Russia.”
Sochi was a very popular tourist destination for Russians during the Soviet era and is now experiencing a new wave of development ahead of the games. A unique location in Russian, its climate feels more Mediterranean than Siberian but within an hour one can be trudging on snow-covered mountains.
McLaren said he hoped the pioneering development would bring more external tourists this area of Russia, as most foreign visitors tend to visit Moscow and St. Petersburg. Three of the new hotels will be branded for this market, while three will remain unbranded to aim for Russian tourists.
“I think at any of the developments where you’re poineering, it’s hard to project rate and occupancy,” McLaren said about the new Sochi hotels. “Some will be branded, some won’t be branded. Some will be purely leisure, some will be business-oriented for conferences.”
The hotels will be 150 to 400 rooms in size, and the properties aimed for Russian tourists will be 3-star.
Interstate is a joint venture between Thayer Lodging and Jin Jiang. Interstate already operates seven hotels in Russia, all located in Moscow, including three Marriotts, a Hilton, two Holiday Inns and one Renaissance. NBB-Development is a Russian real estate development company.