The following article originally appeared in Russian in Bolshoi Gorod. It has been translated by Sophia Rehm, an intern at The School of Russian and Asian Studies, a partner of Alinga Consulting.
At the beginning of July, the Office of the Public Prosecutor in Moscow began inspections of the capital’s hostels, and shut down several mini-hotels. According to the department, many people operating hostels are in violation of the law that hotels can be established only in non-residential properties. The Office of the Public Prosecutor was also concerned about sanitary violations. Moscow’s hostel-owners fear that law enforcement is coming down on law-abiding enterprises as collateral in their “war on flophouses,” part of a Moscow’s wider efforts to stem illegal immigration by shutting down the illegal housing often used by immigrants. Mikhail Nuridzhanov, general director and co-owner of Napoleon Hostel, spoke to Bolshoi Gorod about how hostels can help Muscovites, the role of hotel lobbyists, and why the war on mini-hotels facilitates Russia’s isolation.
When did the problems start for Moscow’s hostels?
They started about two weeks ago (early July), when an announcement went up on the Office of the Public Prosecutor of Moscow’s website about hostels located in residential properties. There were several comprehensive inspections, in which deputies from the Moscow City Duma participated. When necessary, they brought in the relevant authorities – law enforcement, the Federal Migration Service (FMS), the Office of the Public Prosecutor. Yesterday, there was a very biased story on the television program Vesti - Moscow, in which the deputies were also involved. I’m sure that it’s pre-election activity on the part of candidates for deputy, since this is the public mandate from a segment of the population.
Were any hostels shut down as a result of the inspections?
Two or three hostels were shut down, in buildings where tenants were actively complaining and the relevant authorities intervened. The inspections haven’t reached us yet. What’s important is that they don’t paint us all with the same brush, and don’t close down hostels that operate within the limits of the law.
Why don’t Muscovites like living in close proximity with hostels?
Sometimes hostels open in residential entryways that are already congested, which is inappropriate. Sometimes flophouses call themselves hostels, and their residents disturb the neighbors. We had an FMS inspection, and our hostel proved to be just fine. We’ve been in the business for a long time, since 2006, and we comply with all the legal requirements. All our guests are registered – both Russian citizens and foreigners.
What requirements are there for hostels?
First of all, there are sanitary regulations: linen has to be washed regularly; certain disinfecting procedures have to be followed. But we would do all of that even if we weren’t being inspected. If the accommodations are poor-quality, then clients will just go to a more expensive hotel. Some of us are part of a League of Hostels – a self-regulatory organization in which we monitor each other and even conduct informal inspections. There is a small commission that comes and inspects the bathrooms and so forth, and if everything looks good, then the hostel is accepted as a new member of the League at a general meeting. The League of Hostels came to inspect our hostel during the January holidays, when we weren’t expecting them, and they reprimanded us for something, and told us to correct something, and we corrected it right away. Membership in the League is a sign of quality.
What kinds of violations are found during inspections?
The main complaint is that some hostels are located in residential properties, and our legislation prohibits renting out residential property, although in the Civil Code there is no express ban. The Office of the Public Prosecutor stresses that it is prohibited to engage in commercial activities in residential properties – but then half of the offices in Moscow have to be closed down! In our stairwell there are 10 units, and of these, 7-8 are residential properties, but only two are actually residences – and they’re communal apartments at that, which are essentially the same as hostels. The rest are a notary’s office, a beauty salon, and us. They come to us and say: you’re in a residential property, you have to close. What about the beauty salon? We pay the same taxes they do.
And residents don’t complain about you?
I arranged a concierge service; I completely redid the entrance; I installed a video camera over the entryway. Our neighbors in the communal apartments are grateful to us: they didn’t have the money for all that. We partially repaired the pipelines, although the full thing was leaking; we repaired the façade; we replaced the outer doors. The management company had done nothing here in 10 years.
Now the beautiful façade is restored – the building is on Maroseyka Street, across from a famous house built by architect Matvey Kazakov. Yes, we sometimes have household conflicts – someone threw a cigarette butt, for example – but we settle them just fine as we go. We are opposed to governmental agencies that treat our occupancy in residential properties as purely negative. We have a positive side – we invest in communal property, we pay taxes.
Who are your clientele, for the most part?
In eight years, we have had about 15,000 foreign guests. Before the emergence of hostels, the average young tourist couldn’t afford to come to Moscow: the only hotel options were in the upper price range. Hotel rooms cost a few hundred dollars a day, especially if they were modern rooms and not those in some old Soviet hotel. And now? We’re slightly behind St. Petersburg, but in Moscow, too, overall, costs have considerably dropped. This was made possible by small-businesspeople who, like us, are renovating residential properties.
Are you trying to protect yourselves at the legislative level?
We have an expert in the League who works specifically on the legal end – she is in active contact with the Minister of Culture and with the State Duma about changes to legislation that would allow hostels and mini-hotels to exist without issues in the legal environment. Next year, a mandatory certification will be introduced in the hotel sphere – thanks to the League, some of the wording of the law was mitigated. There is work in progress, but it hasn’t been very successful. I suspect that these surprising bills, like Deputy Katasonov’s proposal that seeks to ban renting out apartments across the board, are a result of lobbyists for large hotels. The State Duma will take up the issue in the fall session.
How hard will the crackdown hit the market?
In Moscow alone there are 248 hostels currently registered on Booking.com, and I’d suspect that about 200 of these are in residential properties. And if we take vacation destinations, like Krasnodar Krai, Stavropol Krai, Altai Krai, or the newly-acquired Crimea, and even St. Petersburg – that’s a thousand accommodations. Imagine if they were all suddenly outlawed. Of course, a lot of them will find loopholes; they’ll make deals with friends in the police and other inspectors. By creating these kinds of obstacles for entrepreneurial activity, we’re just pushing the country backwards and generating enormous corruption. Now the market is in crisis, companies are closing – it’s simply counterproductive!
What legislative changes is the League of Hostels proposing?
We would like at least a solid definition of “hostel” somewhere in the law, as well as permission to establish hostels in residential properties, subject to specific rules and regulations.
What do you think the result of these raids in Moscow will be?
4000 people in Moscow will be left without work as the result of an attack on hostels. This might be a small figure as far as the capital is concerned, but it’s palpable for our families. And it will be young people without work experience in other areas. Tourist traffic, I suspect, will drop by a few dozen percent. In the last months, foreign tourist traffic has decreased drastically thanks to the events in Ukraine. Right now, making it impossible for a substantial portion of tourists to come to Russia’s capital because of the cost of hotels will, by extension, contribute to our isolation in the world. Foreign tourists are valuable not only for the country’s economy, but for its political image.
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