Is a Lack of Luxury Hotels Hurting Sochi Bookings?

Here's an interesting story from BusinessWeek: The paper is reporting that Sochi may attract the fewest American visitors to a Winter Olympics in 20 years. While this can be credited to terrorism concerns and difficulties in securing visas, the paper also notes a lack of luxury hotel rooms in the city and surrounding areas.

Russia’s plan to spend $50 billion on hotels and other infrastructure to convert a small city on the Black Sea into a year-round resort has not resulted in enough high-end hotels, the story continues, and the existing facilities have raised prices by 121 percent for the event, according to UK travel website Trivago.

Tour ops have reportedly cited the lack of top-tier hotels in Sochi as a reason to avoid going to the games. “Olympic travelers tend to be high-end travelers and most of our hotels have been three stars,” said Anbritt Stengele, president and founder of the Chicago-based Sports Traveler, who told the paper that bookings for the Games are down by 80 percent of what was expected. “We only have access to one four-star property in the mountains. It’s really put a damper on our sales.”

The Solis Sochi Hotel opened in December, and Marriott recently opened the Sochi Marriott Krasnaya Polyana Hotel, but without more properties catering to luxury travelers, the overall Games (and the city itself) may suffer. Making the situation worse, hotels in the city are raising rates for the duration of the games up to 144 percent above average.

BusinessWeek also noted that Russia’s Olympic organizing committee recently reported that 30 percent of tickets remained unsold three weeks before the Feb. 7 opening ceremony. (A full 97 percent of seats were sold for the Vancouver Games in 2010, in comparison.) With few international flights directly into the Sochi airport, and most Westerners requiring visas, a last-minute rush seems unlikely.