The Russia Journal

As a fourth-generation hotelier, John Wood, the new general manager of Le Meridien Moscow Country Club has lived and breathed the hotel business all his life, since he was literally born in a hotel bedroom in Aberystwyth, Wales. In his 55 years in the industry, he has worked all over the globe trying to find new ways to boost business and keep his guests happy. He recently spoke with The Russia Journal about Moscow's hotel market and his experience overseas.

The Russia Journal: How has your hotel performed this year?

John Wood: This month's hotel occupancy is running at 53 percent, up from 39 percent last year, and we've had worse months. Additionally, we are looking at very healthy figures for the next few months, which is extremely encouraging. The tourism business here is on the rise, and we are already working with Health and Wellness Tour organizers and other special interest groups to bring their clients out here, especially in the winter, because we have a fantastic facility. We will also be bringing in our first golf groups from overseas this summer, and this market will grow substantially in 2003.

RJ: Are the majority of your clients Russian or foreign?

JW: The majority of our clients are Russians. We get a lot of weekenders and over the May holidays we were extremely busy, particularly since the weather was absolutely fantastic. A lot of people come out here to play golf and get away from the city for a couple of days. Our business guests are also largely Russians since they come here for company-organized events such as corporate training groups and conferences. Corporate governance is big in Russia now, and people like to bring their employees out here for training. It's good for people looking to do outdoor team-building exercises.

RJ: What do you see happening in the Moscow hotel market over the next four years?

JW: I see fantastic potential. The market here is just opening up, from what I can see. Moscow has changed completely. It's becoming a European city. The only difference at the moment is that very few people speak English. But, overall, it's evolving in a very positive way and, as more and more foreigners visit, more people will learn English.

RJ: The city government has recently introduced a new $2.4 billion Golden Ring development program to build at least 17 new hotels in Moscow. Do you think this might be too much?

JW: You've got to reassure people that there is quality in the market, so there's nothing wrong with developing further. To attract overseas visitors, people need to believe there are quality establishments and facilities. Of course, there's usually no question that five-star hotels offer high quality, but there's nothing wrong with having good three-star facilities. So you have to get the message across to people that quality accommodation are available. Three-star standards must guarantee cleanliness at all times, but they don't have to be brand-new. When things are well-maintained, they can still look good after 10 years. Don't forget, rooms are your bread and butter, as a very high percentage of the revenue goes through to the bottom line, while only a small percentage of food and beverage revenues trickles down to the bottom line.

RJ: A majority of the hotels the municipal government plans to build are five-star establishments. Does Moscow need more luxury or affordable accommodations?

JW: The demand for five-star quality hotels is continuing to grow, but certainly the market is going to need more three-star hotels as arrivals continue to increase because not everyone is going to pay top dollar. A lot of tourists are on limited budgets. It will come, but it will have to come slowly.

Take Dubai, for example: There they have largely four- and five-star hotels as they are targeting the upper-market business and not the backpackers. India is full of backpackers and, unfortunately, their numbers are going down, largely due to especially bad press. The news is coming out now that 700 people have died in the last 10 days in a heat wave and this does not encourage tourists to come. The net result is that potential visitors are saying that they will travel there when the situation improves, and this is most unfortunate. I was working in India last year, when they had that massive earthquake, but it wasn't felt where I was. However, tourism suffered very heavily as a result. Also, when I worked in Cyprus and the Gulf War began, a few "experts" on television were discussing the locations of where Iraqi missiles could be fired and, in error, they included Cyprus. Those missiles were never capable of reaching Cyprus, but in one day our hotel occupancy went from 350 guests to 12 guests as there was a massive evacuation of the island. That sort of news damages tourism and could have a big effect on Russia, as well. Recently, people told me there was a bomb on Red Square, so I asked them what they meant. Eventually, the news got back that there had been trouble [an explosion in Kaspiisk] on May 9.

RJ: What changes need to be made to boost tourism to the city?

JW: First of all the visa process needs to be improved to encourage tourism. But there are more and more countries that don't need visas and that can only be good for tourism in the long run. Certainly the long queues at Sheremetyevo-2 need to be solved, but Domodedovo poses healthy competition, and this will encourage them to improve things as other airlines threaten to switch airports.

RJ: What is your hotel's competitive edge? How do you try to sell yourself on the Russian market?

JW: We're unique in that we have a golf course, the only 18-hole course in Russia. It's usually fully booked on the weekends. We want to promote golf as a sport, and will be spending a lot of our efforts in this direction. On May 31 we are holding the seventh President of Russia Golf Tournament dedicated to International Children's Day, and President Putin has been invited to attend, but we are not sure if his schedule will permit him to come. If he can come, it will certainly boost the image of golf in Russia and this will help attract more sponsorship money into the sport, and the net result will be that more young Russians will be able to take up the sport. This can help Russia become a strong force in the world of golf.