By Clement Bigot, legal expert and consultant in international relations, for Eurasia Business News – January 26, 2021

View on the center of Vladivostok, with an orthodox church and the Zolotoy Bridge, achieved in 2012 – Photo credit : Leslie Wong on Unsplash.

A new 4-star hotel will open in Vladivostok by the end of the year. The French Accor network plans to take control of three hotels at once to strengthen its capacities in the Russian market, full of promises. 

Accor follows the Japanese company Okura Nikko Hotel Management, which already acquired a 5-star unfinished hotel in the port city on the shores of the Pacific.

The first facility under the management of Accor Hotels is a 4-star hotel in Vladivostok, the famous city where ends the Trans-Siberian railway since 1904. The luxury hotel was originally scheduled to be launched in the spring of 2020 but the coronavirus pandemic postponed the project. Moreover, investors had to find additional funding, as the total cost of the project could amount to several billion rubles (dozens of million euros).

In the last days of 2020, the construction site of the four-star hotel was sharply activated. Commissioning work is already being completed at the facility.

Now Accor New East Europe is negotiating three hotel projects in the Primorsky Krai.

Alexis Delaroff, General Director of Accor New East Europe since 2018, gave details on the project during a meeting on January 15 with the Deputy Prime Minister of the Primorsky Krai Konstantin Shestakov :

 “One of the projects is being implemented, construction is underway. I flew here to finalize the signature of the branding agreement for this facility. This work is expected to be done within the next few months, after which we can make an official announcement. Two other projects are actively discussed, which, too, will most likely lead to the signature of agreements.”

The French businessman and the Russian official have also discussed the investment attractiveness of the Primorsky Krai (Primorye region).

Konstantin Shestakov said to his guest :

The restrictions will be lifted, and we want to meet our guests in maximum readiness for work. Moreover, we are making every effort to improve the quality of services in Primorye. Your company brings its high corporate standards to the regions that you enter with your projects. Therefore, we will be happy to cooperate.”

Elena Demidenko, Deputy Director of the Investment Agency of the Primorsky Krai, added :

“Vladivostok and the Primorsky Krai need modern hotels. Many of the existing sites are already outdated. The new facilities will help to emphasize the status of Vladivostok not only as the capital of the Far East, but also as one of the important points on the map of the entire Asia-Pacific region.”

Accor group is in the top 10 of the largest and most famous hotel chains. In Russia, the group is represented by Accor New East Europe, which has about 50 properties.

The competitors of Accor in Vladivostok are the Japanese company Okura Nikko Hotel Management Co., Ltd and the South Korean Lotte Group.

Vladivostok is the closest city to the countries of the Asia-Pacific region with a European culture, which makes it attractive for tourists. As a large economic and cultural centre, Vladivostok is included in the project for the development of the Far East tourism “Eastern Ring”.

According to official statistics from January to November 2020, the Primorsky Krai saw an increase in investments, in spite of the coronavirus crisis. About 120 billion rubles (1.3 billion euros) have been invested in the regional economy, which is 5% higher than in 2019, reported the Governor Oleg Kozhemyako. A similar dynamics was noticed for the Free Port. Investments grew by 34% over the year and 5,785 jobs were created.

Chinese investors are active in the Russian Far East, which gather several southern regions (Primorsky Krai, Amur region and the Jewish Autonomous Region). China has invested in Russian local companies engaged in agriculture, timber, construction, as well as mineral resources extraction, seafood. However, Russian businessmen and companies would like to increase their ties with Korean, Japanese and French counterparts. The French hotel chain Accor and Legrand Group, the global specialist for electrical and building information systems, are already in the region.

Oleg Kozhemyako, Governor of the Primorsky Krai, wants to attract new investors from Europe and Asia :

“We are open to the dialogue with investors and ready to provide any necessary support in the implementation of the projects that will be useful for both Primorsky region and its citizens. Investments are facilitated by the preferential regimes of the Free Port of Vladivostok and the Advanced Special Economic Zones. We recognize that the main objective of the authorities is to establish comfortable, effective and equal infrastructure for doing business, thus we are constantly working to create a business-enabling environment in the region and remove the administrative barriers.”

Host of the Eastern Economic Forum, an annual forum held since September 2015, Vladivostok is a city and free port in the Russian Far East, with a population of around 606 thousand inhabitants in 2020. As a link between the Trans-Siberian Railway and the Pacific sea routes, the city is an important cargo and passenger port. The cargo turnover of the Vladivostok port, including the total turnover of all stevedoring companies, at the end of 2018 amounted to 21.2 million tons. The main export items are fish and seafood, timber, ferrous and non-ferrous metals and ships. The main items of import are foodstuffs, medicines, clothing, footwear, household appliances and ship equipment.

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© Copyright 2021 – Clement Bigot, legal expert and consultant in international relations.