Closing hostels in Russia will lead to higher prices for hotels
According to Maya Lomidze, the executive director of the Association of Tour Operators of Russia (ATOR), a law banning hostels in residential buildings could adversely affect the development of the tourism industry. These actions will inevitably lead to an increase in prices for hotels throughout Russia and a decrease in demand for the services of tour operators in general.
“Tour operators do not work with hostels in most cases. Nevertheless, the closure of small accommodation facilities, including hostels, will unambiguously lead to an increase in prices in ordinary hotels, especially in St. Petersburg. And this will affect the tour operator prices, and later may also affect the demand,” M. Lomidze explained. According to statistics, about 40% of all 400 Moscow hostels and 80% of 280 St. Petersburg hostels are located in residential buildings.
According to the experts, the closure of hostels can also lead to a shortage of hotels. “Independent tourists who previously often chose hostels will now be forced to stay in hotels. This will reduce competition among hotels which is not good,” Maya Lomidze said.
It should be recalled that in April 2019, the State Duma adopted a law banning hostels in residential buildings and providing hotel services in apartments. The only exceptions are hostels located on the first floors and having a separate entrance. This law will come into force on October 1, 2019.