Big hotel groups carry on despite Russia-Ukraine crisis
Tensions between Ukraine and Russia?could delay hotel projects, and some development deals have been shelved, but the world’s biggest chains are less likely to be deterred as they seek to exploit rapid expansion in eastern Europe, experts said.
The Feb. 22 ousting of Russian-backed Ukrainian President Victor Yanukovich after months of street protests in Kiev and Russia’s subsequent actions in Crimea have led to the most serious confrontation between Moscow and the West since the end of the Cold War.
Russian President Vladimir Putin on Tuesday sought to ease East-West tension over fears of war in the former Soviet republic.
“We don’t know what’s going to happen, but it may turn a lot of investors off?Russia,” said one hotel expert who declined to be named due to client relations.
Marriott, which is due to open its first hotel in Kiev in 2015, says the opening will depend on how the situation develops.
“It’s hard to say right now how that will affect the hotel’s development because it wasn’t due to open this year, it’s about whether the tension continues,” Marriott Europe head Amy McPherson told Reuters at the IHIF hotel conference in Berlin.
The chain says eastern Europe was its fastest growing market in Europe in 2013 and it has plans to open 16?hotels?there by the end of 2015, including six in Russia.
Gillian Saunders, from advisory firm Grant Thornton, said larger operators could afford to absorb some losses.
“The global brands will from time to time have a location where the market fails – e.g. Egypt or Kiev – but that’s why they are global and can hedge their bets,” she said.
Still, sources at the conference told Reuters that consultancy Horwath HTL had seen three potential deals for resorts and properties in the Ukraine fall through since the beginning of the unrest.
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