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Russia Cracks Down on Hotel Price Gouging Ahead of 2018 FIFA

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Unscrupulous entrepreneurs hoping to make a fast back on the “tourist boom” during the upcoming tournament will be punished – some 40 hotels have already been included in a “black list” for offering sky-high prices and further measures are promised.

As the country's preparations for the World Cup are in full force, Russia's federal agencies are fighting against exploitative price levels offered to football fans during the tournament for accommodation.

Russia's federal tourism agency (Rosturism) has published a list of hotels with overpriced rooms in the days when the country will host the 2018 FIFA. The list, dated January 19, 2018, includes 41 hotels in Volgograd, Moscow, Rostov-on-Don, Samara, Kaliningrad and Krasnodar Territory. Most of violations were found in Rostov-on-Don, where overpricing was found in 14 facilities.

Why Hotels Prices for the 2018 World Cup Are Breaking Records

"In some cases, room prices have risen by 260 percent or more," Oleg Safonov, the Head of Rosturism, told Rossiyskaya Gazeta. 

"We have already sent this information to the Federal Antimonopoly Service (FAS) and Russia's Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor) for taking measures," he added.

In separate research, the price of housing for the World Cup at the "Agora" hotel in Kaliningrad, which belongs to the category "without stars," was increased by a whopping 5,283.33%. And while the maximum cost per night (regulated by the government) is set at 2,400 rubles, it reaches some 127,000 rubles during the World Cup 2018.

Another "no-star" condo in Kaliningrad, "Orangevy Dom," pushed prices up by 1,171.25%. The third "leader" among hotels in terms of over-charging- a Rostov-on-Don hotel called "Tikhie Sady" — exceeded the normal price by 2,581%.

"A similar story about the sharp increase in prices was seen at Russian resorts, [when flights to Turkey and Egypt, which are some of the most popular and affordable destinations for Russian tourists, were temporarily suspended]," the Head of Rosturism explained.

"Hoteliers then decided that with less choice tourists will come and pay [such amounts of money] anyway. Together with regional authorities, we conducted systematic work to prevent unjustified price increases. In many cases, we managed to break this trend. I hope that together with FAS and Rospotrebnadzor, we will also change the situation with hotels in the cities hosting the World Cup," Safonov said.

Offenders Will Be Punished

According to Rospotrebnadzor, the maximum price for hotel services during the 2018 World Cup was set a year ago.

"Since the opening match of the 2018 FIFA World Cup will be held on June 14, 2018, and the final match on July 15, 2018,  the actual cost of accommodation in hotels or other accommodation facilities between May 14 [one month before the start of the tournament] and August 15, 2018 [a month after it ends],cannot exceed the marginal cost, established by the government of the Russian Federation," says the message of Russia's Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing.

Entrepreneurs will be fined for violating these agreements.

"…A fine on a legal body amounts to double the amount of excessively received proceeds from the sale of goods (work, services)… for the entire period during which the offense was committed," said the agency in the statement.

In addition, Rospotrebnadzor opened a hotline for complaints about inflated prices in hotels during the World Cup 2018. The hotline will be open until the end of the competition. The agency also noted that the hotline, launched on January 22, will function throughout the 2018 World Cup.

On January 19, travel service OneTwoTrip analyzed how many vacation rentals are still available for the days of the World Cup in Russia. The service found that in Saransk and Volgograd, hotels had already run out of free rooms, in another five cities the share of hotels available for booking was less than 10% of their number in the off-peak period.

The 21st FIFA World Cup is scheduled to take place from June 14 to July 15, 2018, in several Russian cities, including Moscow, Kaliningrad, St. Petersburg, Volgograd, Kazan, Nizhny Novgorod, Samara, Saransk, Rostov-on-Don, Sochi and Yekaterinburg.


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