CIS Countries Provide Opportunities for Investment, But Challenges Remain

Moscow, October 19th, 2011

Horwath HTL, the world’s largest hotel consulting network, hosted a panel discussion on understanding where the opportunities are for good investments outside of Russia, in the CIS. The session, part of the Russia and CIS Hotel Investment Conference was led by Marius Gomola, Managing Director of Horwath HTL Hungary and Russia and featured Vladimir V. Gorashchenko, President and CEO, Double W company Ltd, Anatoly Kondratenko, Director, Acquisitions and Development, Russia/CIs Starwood Hotels and Resorts Worldwide Inc., Aron Libinson, VP Development Russia and CIs, IHG and Murat Yilmaz, VP Development, Dedemen Hotels and Resorts.

The top areas for hotel development continue to be led by the Ukraine, with Azerbaijan, Armenia and Kazakhstan, which are all of interest to hotel developers and operators. The CIS area itself is huge, with 13 countries and almost 130 million people providing a good base, but there are still significant challenges in developing hotels. Bureaucracy remains the number one frustration with recent issues getting hotels open in time for the European cup being a reminder that the number of permits and other red tape can seriously extend the time and cost for getting projects off the ground. Additionally, the lending situation remains a challenge, with Operators reluctant to put equity in to ventures. Interestingly, the panelists believed that either corporate or leisure hotels are attractive for development depending on the location.

Marius Gomola said, “It is important to see the CIS not as one block, but as 13 separate countries, each with its own unique ways and challenges for doing business. As the major international brands continue to look to exploit the secondary and tertiary locations in Russia, it makes perfect sense that they would strategically look at doing the same in the countries of the CIS.

First man advantage is key in many of these countries and that involves a level of risk. Good research and a well-known operator remain vital to persuade financial institutions to lend, but developers also need have patience and tenacity in order to get projects off the ground”

About Horwath HTL

Horwath HTL (Hotels Tourism and Leisure) is one of the pre-eminent consulting specialists in the hotel, tourism and leisure industries, providing unequalled experience and expertise for client projects around the world through a combination of detailed local knowledge and international understanding. Horwath HTL is currently the world's largest consulting organization specialized in the hospitality industry, with 50 offices in 39 countries.

Horwath HTL is a member of Crowe Horwath International, a professional association of accounting and management consulting firms founded in New York in 1915. Crowe Horwath International is currently ranked among the top ten international professional service groups with offices in close to 400 cities in 88 countries.

For more information, contact Marius Gomola on mgomola@horwathhtl.com or James Chappell, Global Marketing Director of Horwath HTL at jchappell@horwathhtl.com.

 

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