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Soccer-Fewer hotels, more campsites as Russia cuts World Cup costs
July 14, 2015 / 12:09 PM / 2 years ago

Soccer-Fewer hotels, more campsites as Russia cuts World Cup costs

MOSCOW/NIZHNY NOVGOROD, Russia, July 14 (Reuters) - Soccer fans at the 2018 World Cup could find themselves sleeping on boats or pitching tents in Soviet-era summer camps as Russia reins in spending on the tournament by cutting back on the number of hotels.

Back in 2010, when it won the right to host the finals, Russia promised to provide 100,000 rooms for visiting supporters, far exceeding the 60,000 required by soccer's world governing body FIFA.

Since then an economic downturn, worsened by a fall in global oil prices and Western sanctions over Moscow's role in the Ukraine crisis, has forced Russia to scale back its ambitions.

The government in April axed plans for 25 hotels to save 27 billion roubles ($475 million) and last month reduced its limit on total spending on the tournament to 631.5 billion roubles, saving 30 billion roubles on accommodation.

A source close to the organising committee said planners had few other options to reduce costs, and had discussed using boats to provide temporary bed spaces in host cities that are near a river or the coast.

"You can't cut the stadium, you can't cut the training grounds, but when you have 20-30 hotels of course there is flexibility there," the source said.

But he warned that cutting back on hotels could mean fans have to make return trips of thousands of kilometres on match days. The World Cup will take place across 11 host cities, from Kaliningrad on the Baltic Sea to Yekaterinburg, 1,700 km east of Moscow on the border where Europe meets Asia.

CAMP SITES AND DORMS

Organisers in Nizhny Novgorod, a host city about 400 km (250 miles) east of Moscow, plan to let fans stay in vacated university dormitories and say budget cuts will not diminish the accommodation on offer.

"One legacy of the Soviet Union is the Pioneer camps, used by children in summer time" said Maxim Podovinnikov, the region's deputy trade and industry minister, referring to the youth movement in which red-scarved boys and girls were brought up to revere Lenin and become good Communists.

"In the woods, near the rivers, lakes and water areas, beautiful places. Those places would be available," he said.

During a tour of a construction site where a five-star hotel is to stand, he told reporters: "In Nizhny at least, we will have plenty of rooms for everyone who wants to come... We don't expect any problems. In fact, you could say we are ready now."

World Cup planners will be anxious to avoid the debacle with hotels at the Sochi Winter Olympics last year, when some rooms were being finished as athletes and journalists queued to check in. Since the Games, critics say luxury hotels have struggled to fill rooms in the Black Sea resort, which is also a World Cup venue.

Sochi's mayor said this week that 20,000 additional rooms were built for the Olympics and hotel occupancy had been around 76 percent since 2014.

"We hope to have one million fans here for the World Cup," Mayor Anatoly Pakhomov told reporters. "We realise the significance of the World Cup and it can only be good for the city, its image, the tourist industry and the economy."

There are signs that private operators, however, are reluctant to invest in Russia's struggling hotel market.

Andrey Yakunin, founding partner of investment advisory firm VIY Management which has investments in luxury and regional hotel chains across Russia, said high interest rates made building hotels specifically for the World Cup unviable.

"Anywhere in the world that had major sporting events where the hospitality infrastructure was developed to be paid back in two weeks, they were a failure," he told Reuters.

The number of tourists coming to Russia from the 45 top visiting nations fell 10 percent quarter-on-quarter in the first three months of this year, according to Russia's Federal Tourism Agency, and Russian consumer spending has also been hit by the economic downturn.

"If you believe that there is a market, (the World Cup) is the icing on the cake," Yakunin said. "You'll charge crazy rates, you'll get a full house. But you won't pay back that hotel in two weeks." ($1 = 56.7630 roubles) (Writing by Jack Stubbs; Editing by Timothy Heritage and Mark Trevelyan)

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