On Track with Azimut

Not long ago, the Azimut Hotel Kostroma became the second addition to the rapidly developing Azimut Hotel Network, which in a short period has managed to capture a leading position in the Russian hotel business with the sheer quantity of its hotel rooms. The hotel network is oriented toward corporate tourism. Though the rooms generally are of three star quality, truly excellent service brings the hotel’s rating closer to that of a four star hotel.

Azimut Hotel Kostroma is situated at the entrance to Kostroma on the road to Moscow, 372 km from the capital, at the junction of the Yaroslavskoe and Ivanovskoe highways. Surrounded on three sides by massive forest, the 3 ha lot on which the hotel and its infrastructural elements are based is well separated from the industrial regions of the city. The total area of the hotel is 6400 sqm. Early, this lot was the home of the motel, Inturist-Kostroma, a structure built in the 80s by Yugoslavian contractors as part of a Swedish project. The facility adopted the Azimut brand in September of 2006. The proprietor of the hotel at the present moment is Azimut Kapital, a subsidiary of the investment company, Nerl, and the hotel is operated by Azimut Management Group. The hotel was purchased in 2004, but the identity of the owner of the property at that date has not been published, nor has the sum of the purchase.

The management company was created in 2004 in order to operate four star hotels united under the brand, Azimut Hotel Network. Today the company includes 55 experts with significant experience working in the hospitality field with international companies. The company’s central offices are located in Moscow. Its business volume for 2006 was 1 billion rubles, and its number of rooms reached 3,000. This last indicator is a record for networks operating in Russia. The management company is currently operating 125 thousand sqm of real estate. The company was founded in 1993 and is now a large player in the market by way of its mergers and acquisitions. It now owns 13 thousand ha of land in the Moscow Oblast. Increasing its investment activities, the company has created a wide portfolio of liquid assets in the real estate sphere and also owns the business center, Krasnaya Roza. The company has been advancing its Azimut brand of hotels on the market since autumn of 2006.

Eight Hotels in Seven Cities

The network’s purchasing of old, ineffectively operated Soviet hotels began in 2004. Eurasia Hotels and Resorts, on behalf of Nerl, began to gradually buy up the under-priced three star hotels in the regions. The project did not plan to make considerable architectural changes to any of its new properties. This was ultimately Nerl’s plan of action – to purchase the old hotels, transforming them only through interior design work and the expansion of their services. According to the director of Azimut Hotel Network, Sergei Lysenkova, this guaranteed the network a certain level of economic expedience. The first purchase was the Hotel National, in Samara, followed by the Rossiya in Ufa, and the Inturist Kostroma in Kostroma. The hotel, Lotos, was leased long term in Astrakhan, and the Vladivostok and Amurskii Zaliv were purchased in Vladivostok, as well as the Artik in Murmansk. The largest property in terms of area and number of rooms was purchased in 2005 in Saint Petersburg, the Sovyetskaya, with 1030 rooms in the Admiralteiskii district on Lermontovskii Prospekt, 43/1.

In 2006, the seven hotels were united into the hotel network and presented on the market under the Azimut brand, though the Murmansk property was purchased later. Plans for the creation of the three to four star hotel networks have been announced by many companies – Tashir, Siti Otel, Russkie Oteli, Bel-Development, and Inteko. But so far very few of these plans have been carried out.

The Azimut network now includes eight hotels in seven cities throughout Russia. All the hotels are oriented toward business tourists. The network operates according to unified standards and a unified management system. Today the network has secured its position in Saint Petersburg, Samara, Ufa, Kostroma, Astrakhan, Vladivostok, and Murmansk.

“This assortment of cities was created based on the presence of various interesting economic indicators from the supply point of view,” says Sergei Lysenkov. However, owners of the brand confirm that their ambition is to spread into still other cities with populations of over one million. Today the Azimut brand has an expressive style, which is distinguishable in all of the networks’ properties. The brand’s positioning, its vision, and its marketing package were designed by the well-known branding agency, Mildberry Moscow.

The Second Purchase after Petersburg

After the Saint Petersburg project, the Azimut Hotel Kostroma was the second hotel opened. This city was chosen due to a number of attractive economic indicators in the region. Of course, the purchase was thoroughly analyzed in terms of the city’s potential as a whole.

Kostroma is a geographical and cultural center and an essential part of the Golden Ring. The city is situated on both shores of the Volga. It was founded in 1152 and was a part of the territory of the Suzdal prince, Yuri Dolgoruki. Many historical and architectural monuments remain here, such as the Svyato-Troitzkii Ipatevskii Monastery and the Bogoyavlenskii Anastasin Monastery. In the Soviet Union, the tourist flow into the area was one million visitors per year, those this number has now been cut nearly in half.

After the acquisition, a plan of action was developed for its refitting and reclamation. “All the hotel rooms in the entire network were standardized, and remodeling was carried out according to predetermined guidelines. The furniture was replaced, as were the sanitation equipment and the window treatments. The electronic locks were also added,” explains Andrei Zheleznyakov, the general director of Azimut Hotel Kostroma.

The facade of the building was remodeled and a modern management system was put in place, including a security system with video observation. The complex’s infrastructure was brought up to modern standards. According to Azimut Management Group, the reconstruction cost around $400 – 500 per sqm. But the most essential changes were the supplemental services that the hotel began to offer.

Prepared for Launch
According to Zheleznyakov, the current flow of visitors to the Azimut Hotel Kostroma may be divided into four groups based on the purpose of their visits:

• Guests traveling alone on business
• Corporate tourists attending conferences, symposiums, or corporate events
• Tourists
• Guests traveling for personal reasons

Ultimately the hotel in Kostroma is oriented toward the first two groups. The highest demand for the hotel’s services stems from companies planning to hold corporate events in the hotel – presentations, conferences, or symposiums. The management company has created a package of proposals of which potential clients may choose to take advantage.
The hotel generally is occupied at over 60% capacity. Guests are sure to take advantage of the classically Russian bathing complex. According to Andrei Zheleznyakov, there exists a certain amount of competition within the city, especially in the tourism segment. But for the corporate tourists, the Azimut is in a league of its own and, regardless, the business tourism in Kostroma is limited.
The basic structure of the hotel consists of 74 rooms divided into several categories based on quality. The ‘comfort’ category offers accommodations for one or two visitors with one large bed or two individual beds. The hotel also offers the ‘business’ category. The Azimut Hotel Kostroma is equipped with satellite television and direct lines. There are a further 16 rooms situated in the bungalow zone, which is a short walk from the sauna.
The average cost of a hotel room in the Kostroma hotel is just over 2,000 rubles. Breakfast is served as a Swedish buffet with 36 dishes to choose from, included with the price of the room. “Naturally, an essential part of the hotel network business is the development of a regional brand along distinct and unified standards in order to optimize expenses. Many of the products we use are warehoused in Moscow and purchased in bulk at a discount by the network. We also spend less on marketing thanks to the collective nature of branding,” says Andrei Zheleznyakov. The network also makes an impression with the work of its personnel. The management company has created a training center, an internal university of hospitality, for its employees to receive all the appropriate preparation and guidance for their work in the service industry.

Stretching for the Fourth Star
“Our hotel is currently rated as three star quality based on the class of our rooms, but our service easily earns us four stars,” says Andrei Zheleznyakov. Indeed, the hotel does offer an array of services which are typically only offered in hotels of significantly higher quality, such as the knowledgeable concierge and the 24-hour room service. The business center also is open around the clock, offering internet access, a fax machine, printers, and even copying services.
The Azimut Hotel Kostroma also offers three independent restaurants. This includes the bar offered in the lobby of the hotel – the BirShtadt, as well as a restaurant with more standard Russian cuisine designed in the style of a rustic Russian cabin, and a more spacious facility with capacity for 180 guests, the eponymous Azimut Restaurant. The last often hosts various banquets and corporate functions. The hotel also offers the nightclub, Paprika, and an outdoor cafe on the hotel terrace, which is open only during the warmer times of year.
Besides the entertainment elements of the hotel, all the necessary services are offered for the hosting of events, banquets, and conferences. The hotel has a 25 sqm hall to accommodate 20 guests and a 182 sqm hall to accommodate 120 guests. The halls are rigged with LCD projectors, computers, video recorders, televisions, and CD players.
But the hotel’s finest gimmick is the bathing complex, built in accordance with all the old traditions. The two story building is situated behind the hotel and consists of the classically paired cold-water and hot-water fonts for rejuvenation, an herbal tea installation, a massage room, rooms for relaxation, and a common area with karaoke and a fireplace.
The hotel goes through regular upgrades. Before the end of year, the ceilings will be redone in the meeting halls and the floors will be refinished in the restaurant. During the next twelve months, air conditioners will be installed in every room. As before, the hotel will remain oriented toward corporate tourism, and the managers of the hotel will continue to advance their property along the road to its fourth star.