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December 29, 2021 10:25 am

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Photo by V. Novikov. Press Service of the Mayor and the Moscow Government

Investors building new hotels or converting existing buildings into hotels can apply for city benefits.

The Moscow government is implementing a program to create new hotels in the city. Resolutions on this issue were signed by Sergei Sobyanin.

Investors who are building new hotels or adapting existing buildings that are in city ownership will be able to take advantage of the provided support measures.

The program is aimed at developing the hotel infrastructure, increasing the number of rooms, attracting investments in the hotel industry in Moscow, as well as efficiently using the city’s non-residential stock.

Support measures

As part of the program to stimulate the creation of places of employment in the city, the Moscow Government will provide incentives for land payments to investors who are building new hotels.

Moreover, projects must meet a number of conditions:

– in the documents as one of the main types of permitted use of a land plot for construction, “hotel service” must be indicated;

– the total area of ​​the object cannot be less than three thousand square meters;

– within a year after commissioning, the hotel will need to pass the classification and receive the category “three stars”, “four stars” or “five stars”;

– the object must be used for conducting economic activities in accordance with OKVED 55.10 “Activities of hotels and other places for temporary residence”, it is also possible to conclude agreements with hotel operators.

Developers can apply for special status and the corresponding benefits at investment portal of Moscow.

Retrofitting existing buildings

For the placement of hotels, Moscow will provide non-residential facilities owned by the city. The initial rental rate will be determined based on the results of the auction; the lease term will be 20 years.

After major repairs or works to preserve the cultural heritage site, investors will be able to apply for a preferential rate under the program “1 ruble per 1 square meter”.

To receive benefits, you will need to meet the following conditions:

– the new hotel must be classified and correspond to the category of “three stars”, “four stars” or “five stars”;

– the object will need to have the status of “city hotel (hotel)” or “hotel located in a building that is an object of cultural heritage, an identified object of cultural heritage and (or) an object that is the subject of protection of a historical settlement”;

– at least 75 percent of the area of ​​the object must be included in the room stock.

In addition, apartments cannot be placed on the territory of the hotel. The tenant is obliged to start providing hotel services after 18 months if the building required major repairs, or no later than five years after the start of work on the preservation of the cultural heritage site.

During the coronavirus pandemic, hospitality and tourism in general were among the worst affected sectors of the economy. In 2019, Moscow was able to host a record 25.1 million guests, but in 2020 the growth in tourist flow decreased significantly – to 13.6 million guests, which is 46 percent less than in the previous year.

From January to September 2021, 14.9 million people visited the capital, and hotels were occupied by an average of 61.6 percent. A significant increase in the tourist flow is predicted after the lifting of restrictions on entry to Russia and the introduction of electronic visas.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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