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Hostels bring profit even with occupancy rate less than 40%

08:07, 15 апреля 2011

Organization of hostels is a rather profitable business that helps development of tourism and improvement of the image of the city where they appear. Hostels for example help destroying the stereotype of Moscow as a very expensive city that attract only wealthy tourists, accomodation at a price of 400 to 900 Rubles per day is acceptable for guests of different income.

Tourism Committee of the Government of Moscow in cooperation with the recently created non-commercial partnership «Union of Hostels» demonstrated to the journalists the variants of economical accomodation in the capital. The chairman of the Union Ivan Ksenofontov explained that the idea of hostels was born in Germany more than 100 years ago. The essence of the idea is provision of a minimal package of accommodation services at a low price. Average price for a hostel accomodation in USA is 10-20 $ per day, in Europe – same amount but in EURO. Hostels are also very popular in Australia and New Zealand, here 15% of all hotel beds fall on hostels. In Russia the prices range from 400 to 900 Rubles and according to Mr. Ksenofontov during last 2 years the prices decreased. Before the crisis average price reached 20 EUR per day and now the competition increased and the rent went down, thus the prices for accommodation in hostels lowered. The majority of the guests – not rich young people, school groups, for whom a room for 4 – 9 persons is a very acceptable variant, and families with children.

Interesting fact is that 50% of the guests of hostels are foreigners. Daniil Mishin, one of the initiators of the «Union of Hostels» and the member of the board of the organization told RATA-news that even foreign participants of travel exhibitions «Intourmarket» and MITT make use of the possibilities of inexpensive accomodation in the center of Moscow. So no wonder that English language knowledge is a mandatory requirement for working in a hostel.

Mr. Mishin explained that the first hostels appeared in Russia 6 years ago and now there are hostels in 18 cities. There are 45 hostels with 2300 beds in Moscow, 52 with 2800 beds in St. Petersburg. There are hostels in Veliky Novgorod, Sochi, Suzdal, Ekaterinburg, Irkutsk, Ulan-Ude and other cities.

«Union of Hostels» reports that 9 hostels were opened in Moscow in  2009, in 2010 – 14. General director of the managing company “Your hotel” Mr. Gennady Ustinov said that a big hostel  for 120 beds will be opened in Stoleshnikov lane till the end of this year. It will take the whole floor (800 m2) in a historical building, and the guests will have a separate entrance from Petrovsky boulevard.

Main problem of the hostels is seasonality, in summer there are not enough beds, in winter – not enough guests. Mr. Sergey Shpilko, the chairman of the Tourism Committee of Moscow thinks that there are a lot of stereotypes that prevent development and growth of this business. «People are sure that all hostels are located in the suburbs. But in Moscow for example the majority of the hostels are in the center, in the district of Kitay-gorod and around Stoleshnikov lane. People imagine that the level of service in hostels is very low, but this is not true. One more myth is that the prices are higher than in Europe. Some think that only homeless people and gastarbeiter stay in the hostels, but this also does not correspond to reality».

Moscow Tourism Committee plans to cooperate closely and actively with the «Union of Hostels» in promoting such type of accommodation.

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