Sochi Olympics Implementing Hotel Price Cap

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It’s a commonly known fact; when there’s a big event in town, hotels tend to increase their prices. No more so than for the biggest event in sports; the Olympics. However, The Economic Development Ministry officials in Russia have said that they will implement a price cap for the upcoming 2014 Olympics to be held in Sochi.

The ministry has published a draft decree on state regulation of hotel room prices that mandates a maximum daily rate of 14,000 rubles ($453). Speaking to The Moscow Times, Sergei Korneyev, the head of the tourism department at the Culture Ministry, this maximum price was presented in Russia’s initial application to host the games. The prices were determined by an expert committee that took into consideration the hotel rates in Sochi and the prices in cities that were competing with Russia to host the Olympics.

Hotel owners and hospitality managers are not okay with the price cap since hotel rooms in Sochi are more expensive than the prices set by the committee and a five-star hotel room for 14,000 rubles per night would be at cost. What’s more, hospitality managers speculate that these price caps would result in hotel room scalping, wherein rooms are booked, then resold at exorbitant rates.

Source courtesy The Moscow Times