Moscow has notched up another victory in its dash toward capitalist nirvana, according to a new survey that shows profits made by hotels there are greater than in any other city in Europe.
Western European cities were left trailing after the pure profit made on an average hotel room in the Russian capital rose to a dizzying 5,225 roubles (£101) in the first six months of 2007.
Moscow has transformed itself over the last 15 years from a drab Soviet Gotham to a glittering metropolis with huge skyscrapers, casinos and luxury apartment blocks. Shopping malls such as the Barvikha Luxury Village on the western outskirts of Moscow are dotted with elitny shops and boutiques.
In a sign of the times, Mikhail Gorbachev, the former Soviet president who tried to prop up Communism with his Perestroika reforms, announced last month that he would be starring in a new advertising campaign for Louis Vuitton.
Demand for luxury hotel rooms has rocketed while supply has slumped, largely due to the destruction of some old hotels such as the Rossiya, a 3,200-room riverside behemoth. The average price for a room in a five-star hotel has doubled to £360 in the last year. The average room rate went up by a third.
In its survey, TRI Hospitality Consulting found that London and Paris were well behind Moscow with £75 and £58 profit made on each room respectively. Berlin hotels brought in only a third of the Russian capital's profit, at £35.
Analysts said the profit margin reflected a squeeze on supply, high demand and the grotesque disparity between rich and poor. Russia has 53 billionaires while the average monthly salary is 13,800 roubles.
The survey found that hotels in Moscow spent about 20% of total revenue on salaries, compared with 38% in Paris.
Vitaly Kozlov, chief executive of the Russian Federation of Restaurateurs and Hoteliers, said: "It's true that by world standards hotel staff in our country have very low