Many Russian hostels and hotels located in residential buildings are still open for booking despite a controversial ban that went into effect yesterday, according to media reports.
Under the new law, it is now illegal to provide hotel services in residential buildings, raising concerns about the future of low-budget travel to Russia. Hoteliers previously warned that the ban could close up to 40% of hostels in Moscow and 80% in St. Petersburg, costing 16 billion rubles ($ 243 million) in lost annual tax revenue.
The ban has yet to result in a sharp increase in hotel and hostel closures, RBC news site reported Wednesday, citing data from the 2GIS mapping service.
Prices for hotels and hostels also remained stable, according to Booking.com data analyzed by RBC.
In Moscow and St. Petersburg, the total number of hotels in apartment buildings has actually increased since the law was passed in March, RBC reported. There is now less accommodation above the ground floor, as the law requires separate entrances for guests.
Alexei Tikhnenko, Head of the Hotel Department of the Moscow City Tourism Committee, Recount Rambler news site that 89 hostels and mini-hostels have closed in the Russian capital since the law came into force. About 60% of them were located in the city center, he added.
Some real estate owners have simply changed their type of business to circumvent the new ban, said Alena Yenova, director of a St. Petersburg hotel association, as quoted by RBC. They can close their hostel, remove it from reservation services, and âopenâ a new business, renting the property through daily or long-term rental contracts.