Olympics: What do you do with a mountain resort with Games gone?

ROSA KHUTOR, Russia - Stanislav Kuznetsov has a headache like no other: it measures 780,000 square metres and covers a large expanse of Russian mountainside.

The Gorky Gorod resort in the snowy Caucasus peaks above Sochi was packed during the Winter Olympics. Now the Games are ending, Kuznetsov's job is to keep filling the nine hotels.

And the holiday apartment. And the luxury stores. And the large supermarket complex, which includes a massive artificial beach and lake on the top floor.

"We are seriously thinking about the future," said Kuznetsov, deputy chairman of the board at Russian state lender Sberbank, which owns 92 per cent of Gorky Gorod.

His challenge epitomises the broader struggle that Russia faces to get a lasting return on an estimated US$50 billion (S$63.4 billion) spent on developing the region for the Sochi Games.

Kuznetsov appeared upbeat when he spoke to Reuters text and television in an interview on Friday, two days after hosting a major brainstorming session on what to do next with a complex than can accommodate up to 6,000 people.

He talks of a bright future in both winter and summer, offering access to the mountains and the Black Sea coast.

But in an earlier more informal conversation he had been franker about Gorky Gorod, which translates as Gorky Town.

"My personal opinion is that to give this town the chance of a new life we will need a powerful new vision of its future," he told reporters on Feb 5.

"Obviously there is a fear about what will happen, that without a big new idea the significant success of this real estate will of course be put in doubt."


Sitting still is not an option, since the overall investment by Sberbank and others totals 80 billion roubles (S$2.9 billion) and this money needs to be made back.

Another complicating factor is that Gorky Gorod is not the only mountain complex with rooms to fill. Energy giant Gazprom runs the nearby Laura complex while oligarch Vladimir Potanin built Rosa Khutor.

Kuznetsov sees few problems filling rooms in the months to come, since Sochi will host a Group of Eight summit in June and a Formula One race in October.

In general, though, officials say foreign tourists are unlikely to flock to the region any time soon, if only because there are virtually no direct flights to Sochi from abroad and some potential travelers are put off by visa requirements.

This means Kuznetsov needs to attract plenty of Russians to the brand new resort to keep the area busy.

"No one will invest in a space that after a big event is more or less a ghost city," said Carsten Albert, manager of two up-market hotels in Gorky Gorod.

Two kinds of domestic tourists on the target list are those with money who usually travel abroad and those who vacation in Russia but might think Gorky Gorod is too expensive.

"Many people say the climate here is very similar to a Swiss valley," said Kuznetsov, claiming that the air blowing up from the Black Sea is infused with oxygen from the waters.

"To be honest, we can already compete with the major resorts in Europe."

He is also optimistic about the resort's ability to attract conventions, spa tourists and people who variously want a skiing holiday in winter and an outdoor experience in summer.

Some eight million people visit the hot, pebbly beaches of Sochi every year and most of them would love the chance to cool off in the mountains as they admire the snow, he said.


Visitors polled by Reuters in the streets of the resort had mixed opinions about whether they would come back.

"I find the area pretty and I could imagine going skiing here but I think there are many other closer ski areas that you'd go to for less money, effort, no visa and so on," said Jana Passkoenig from Germany.

"I like it very much ... I wasn't expecting to see something like this. If we come here in the future we would start skiing right away, will stay here and ski," said Nikolai Frolov from the city of Ufa in the Ural mountains.

One way to fill rooms is to offer good deals.

"We understand this is a new resort and to attract people, even Russian guests, we need to attract them with prices as well," says Maria Volkova, a public relations specialist with Interstate, a firm that operates four of the hotels.

Once the Games are over, the price for a regular room will be just 3,700 roubles, including breakfast.

Kuznetsov often uses the word "comfort" and the modern accommodation shown to reporters in four separate hotels bore little resemblance to old-style Soviet rooms which contained a single bed, ancient sheets and a noisy fridge.

Sberbank also plans to raise funds by selling around 1,500 apartments and according to Kuznetsov, aims to get its money back in five to seven years.

Albert, who worked for 12 years in the chic Swiss resort of St Moritz, dismisses this as unrealistic.

"People want to get rich in months, not even in years, not in decades. That's the biggest problem in Russia, that people can't wait," he told Reuters.

"They want to get back their investment in hotels maybe in seven or eight years when the whole world knows it comes back in 20 to 25 years."