InterContinental Hotels Group announced that it had signed a contract with a Kyiv-based developer
Another internationally recognized hotel operator is planning to hang out its shingle in the Ukrainian capital, where available rooms continue to be at a premium.
InterContinental Hotels Group announced on Feb. 22 that it had signed a contract with a Kyiv-based developer allegedly controlled by Ukrainian tycoon Leonid Yurushev to open a new five-star hotel in the center of Kyiv within the first quarter of 2008.
The new hotel, which is to boast 280 rooms in addition to a ballroom, spa, shopping and a roof-top restaurant, will be located near the city’s picturesque St. Michael’s Cathedral.
The investment company, Yaroslaviv Val, was registered in Ukraine in 2001 and boasts participation in other Kyiv projects, such as the upscale Leonardo business center, which was recently sold for $95 million. Sources close to the deal said Yurushev controls Yaroslaviv Val, adding that the project is at least partially funded by his bank, Forum Bank.
Yurushev is currently holding talks to sell Forum, rated as one of Ukraine’s top 10 Ukrainian banks in terms of assets, to a European banking group.
A top executive at Yaroslaviv Val said his company had already invested $30 million into the new five-star hotel, whose budget will go as high as $65 to $70 million.
InterContinental Kyiv will join the UK-based operator’s network of more than 3,600 hotels in over 100 countries.
According to InterContinental Hotels Group’s website, the group operates under such brands as Crowne Plaza, Holiday Inn, Holiday Inn Express, Staybridge Suites, Candlewood Suites and Hotel Indigo, in addition to the Intercontinental brand.
Informed sources said Leonid Yurushev, the majority owner of Forum Bank, is the main owner of Yaroslaviv Val, the real estate development company backing the construction of the InterContinental hotel project in Kyiv. Officials at the bank and the developer, however, refused to confirm or deny this information. (File photo)
Serhiy Piontkovsky, a partner with the Kyiv office of the law firm Baker & McKenzie, which has advised Yaroslaviv Val in the deal, said the Ukrainian developer had considered other operators, but InterContinental Group offered the best conditions. For example, he said the group will connect the new Kyiv hotel to InterContinental’s international booking system.
As of today, the only internationally recognized hotel operator in Ukraine is Radisson SAS, which launched a four-star hotel in the capital in 2005.
According to Ludmyla Mesherskykh, head of regional development for Ukraine’s State Tourism and Resorts Service, Kyiv currently boasts about 120 hotels, most of which are limited in space and services.
Premier Palace, controlled by a Moscow-based business group, is so far the city’s only five-star hotel. The recently launched Opera Hotel, owned by Ukraine’s richest man Rinat Akhmetov through his System Capital Management holding, is still waiting to be officially recognized.
Ahead of InterContinental for the honor of becoming a five-star hotel under an internationally recognized brand will be the Hyatt Regency Saint Sophia Kyiv. Scheduled to be completed in April near the site of the InterContinental, the Hyatt Regency Saint Sophia hotel project is being backed by one of Ukraine’s largest industrial holdings – Industrial Union of Donbass, itself controlled by group CEO Serhiy Taruta and National Security and Defense Council Chief Vitaliy Hayduk.
Mesherskhykh said the high demand for upscale hotels is fueled by the increasing amount of business travelers visiting the country, not tourists.
“We don’t have such a big stream of tourists. Thus, [five-star] hotels are in demand by businessmen,” he added.
Another international operator, Hilton, signed a contract last spring with International Business Centre and Hotel Business Development Company to operate a five-star Hilton Kyiv – also in the city center. The completion date is scheduled for 2009.
