Leisure group Ladbroke today demonstrated its confidence that the Russian economy would get over its current turmoil by announcing plans for the first Hilton hotel in the country.
The 312 bedroom, five star Hilton Moscow in Nikitsky Boulevard, near theKremlin and Red Square, will cost some £35m and should open early in the new millennium.
In London today an agreement to develop the project was signed by the Mayor of Moscow, Yuri Luzhkov, and the chairman of Ladbroke subsidiary Hilton International, Peter George.
It is believed to be the first Russian deal of this size to be signed by a British company since the current crisis in the formerly state-run economy broke.
George insisted he was not unduly worried by the collapse in the value of the rouble and the well-reported difficulties being faced by Russian businesses.
“We’ve been involved in the project for 18 months. Obviously, circumstances have changed during that time but we are in this business for the long term,” he said.
There are already several Hilton hotels in the old Communist block and the group has plans for other developments in Russia and the Commonwealth of Independent States.
The plan is for Hilton International to manage the Moscow hotel on behalf of the new joint venture company which will actually own it. Hilton International will be investing around £3m in the project while the City of Moscow has made the property available. In all, about 75% of the funding package is now in place.
Luzhkov played down the effect of the current economic difficulties on his city. Speaking through an interpreter, he said: “Some would describe the courageous act of the Hilton group… I do not see any hand of courage in this.” Instead, he said, he saw a normal, mutually beneficial partnership.
As well as Hilton International, which operates some 165 hotels in more than 50 countries, Ladbroke also owns the UK bookmaking chain.
EGi News 30/09/98
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