On Friday, the State Duma adopted in its third and final reading a law on assigning “stars” to tourism industry facilities: hotels, beaches, ski resorts, and on clarifying the timeframe for administrative liability for violating legislation on provision of hotel services.
Prices are dictated by the market
Alexander Kurnosov, Vice President of the Association of Tour Operators of Russia, believes there is no direct correlation between hotel classification and price level. "Hotel prices depend on several factors. Primarily, supply and demand. Secondly, the hotel's policy and target audience—corporate clients, beachgoers, individual travelers, or foreign tourists," he said.
According to the expert, prices also depend on the season: how busy the hotel is compared to other hotels. For example, during the St. Petersburg Economic Forum, prices can reach "such exorbitant levels that no classification can help, and even a two-star hotel can sell for several times more than a five-star hotel."
From 10 thousand to 150 thousand rubles for classification
Gennady Lamshin, head of the Russian Hotel Association, also believes that mandatory classification will not affect prices, as they are "dictated by the market."
"The market itself will primarily regulate pricing for classification. The cost of the classification procedure is minimal: from 10,000 rubles for a hotel without stars to 150,000 for a 4-5 star hotel. This amount is nothing to them. Moreover, it's issued for three years, meaning it must be divided by 36 months, and the monthly fee is mere pennies, which won't affect prices in any way," he explained.
At the same time, according to G. Lamshin, many hotel owners were content for a long time with the fact that there was some profit, and did not invest in improving service.
"These owners will, of course, incur very significant costs for the classification process, and compared to the costs of experts from accredited organizations, this will be many times greater. For many, it's an order of magnitude higher than the cost of the classification itself. They'll certainly want to raise prices, but who's going to go to them when there are those on the next street who have been constantly developing and improving their standards?" the expert said.
There will be no price reduction
G. Lamshin emphasized that there will be no price reductions following the mandatory classification law's entry into force. "We have to be realistic. This can be said and promised, but it won't happen," he stated.
A. Kurnosov believes that the purpose of classification is “first and foremost to reduce unfair competition and improve the quality of the tourism product for the traveler.”
The law proposes a phased introduction of mandatory classification of tourism industry facilities in the Russian Federation: from July 1, 2019, for hotels with more than 50 rooms; from January 1, 2020, for hotels with more than 15 rooms; and from January 1, 2021, for all hotels. Currently, the classification of tourism industry facilities, including hotels, is voluntary in most regions. The classification will be carried out by state-accredited bodies.
The law also provides for fines for operating without official classification. For small hotels, the fine will be no less than 50,000 rubles, for medium-sized hotels – 200,000 rubles, and for large hotels – 1.5 million rubles. Furthermore, the hotel may lose its registration certificate, effectively ceasing operations.
Source: tourism.interfax.ru