Hoteliers in Ukraine are putting pressure on Western hotel firms to exit from Russia.
An open letter Hotel News Now had early access to from the Kyiv-based Ukrainian Hotel & Resort Association and State Agency for Tourism Development of Ukraine has been addressed to the CEOs of the Western hotel companies with the seven largest room counts in Russia.
Those firms are, in alphabetical order: Accor, Hilton, Hyatt Hotels Corp., IHG Hotels & Resorts, Marriott International, Wyndham Hotels & Resorts and Radisson Hotels Group.
The letter also has been addressed to Jens Zimmer Christensen, president of Europe’s principal hotel and hospitality organization, HOTREC, and Zurab Pololikashvili, secretary general of the United Nations World Tourism Organization.
The letter states: “We are bitterly disappointed that almost all prominent hotel companies have only made token statements about their operations in Russia. We consider the declaration to suspend new hotel development in Russia as an empty and cynical gesture since, with the withdrawal of international financing, no pipeline hotels can be completed in any case without [Vladimir] Putin’s oligarch’s money. So far, only IHG and Marriott have made minor inconveniences by closing small representative offices in Russia, and all major hotel groups continue to operate all their hotels.”
Ivan Loun, international relations officer at UHRA, said that it is not enough for Western hotel firms to say they are supporting Ukrainians and refugees and stopping development in Russia.
“Everyone has to try to create an environment when it stimulates Russians to take down their regime. Every effort helps. The more squeeze on the economy there, the higher probability that [the war] will end soon,” he said.
Even if profits and fees from continued operations in Russia are donated to charities, that business still will generate money in Russia that can be used to prolong the invasion, Loun said.
“I am in this industry, and I understand I am biting the hand that feeds me, but hotels operating from this flow of money — and we cannot check each hotel — end up with wealthy Russians who cannot be hiding their political and economic position from the ruling [Russian] party,” he added.
A March 2 letter from the UHRA to members of HOTREC urged that Russian hotel interests be expelled from the UNWTO and International Air Transport Association and that major online travel agencies, tour operators and international wholesalers terminate their relationships with Russian firms.
The letter said tourism in 2019 contributed $80 billion, or 4.8% of gross domestic product, to Russian finances.
The UNWTO held a meeting in Madrid on March 8 to consider suspension of Russian involvement, but there has not been any official announcement.
On behalf of its members, HOTREC also sent a letter, in its case to Mar de Miguel Colom, chairwoman of the board of the affiliated members of the UNWTO, asking for Russian membership in the UNWTO to be suspended.
Marie Audren, director general of HOTREC, said her members — essentially national bodies representing hotel and tourism interests — wanted to make an “important statement of support for when the [UNWTO] general assembly can undergo the formal process.”
“Hopefully that will happen soon. It is clear the Russian Federation is not in principle with the UNWTO mandate and values,” Audren said.
She added there is increased tension in the matter due to Ukraine becoming a member only last year.
Get Up, Stand Up
Loun and the UHRA said they do not wish to direct their anger at hotel operators, who they maintain good relationships with, but that they regard much of the commentary coming from global hotel firms as being empty promises.
“These companies come from countries that have guidelines issued by their governments on business ethics. These firms all have nice, white documents about business ethics and human rights. All of that is outlined, so they know what they need to do," he said. “International laws are being violated. Everything is written there in those guidelines and documents.
"And we know how those [franchise and hotel management agreement] contracts are built. They are built by smart layers and contain numerous windows for them to get out without penalty. They should also be thinking of their reputations."
Loun said only Marriott has responded directly.
“We received one mild reaction from Marriott, basically saying what they already said publicly. We do appreciate that, but we simply do not see it as sufficient. We understand [Ukraine is] a small fish in the industry, but everyone has the moral obligation to ignite the spark,” he said.
Loun said he realizes he is biased on the matter.
“I am Ukrainian, and my country is being slaughtered,” he said.
He added Irina Sidletska, UHRA’s president and CEO of Ukrainian hotel firm Premier Hotels & Resorts, remains in Kyiv.
“She is on the front line, at the hotel or in a basement. There are even a few guests,” Loun said.
Ukraine Still Standing
In Ukraine, hotels continue to operate where there are not attacks, Loun said.
Currently based in Lviv, in western Ukraine, Loun said hotels there have a few guests, but mostly are operating as refugee and humanitarian hubs.
“The city is a transit point, with guests staying a night or two. Talent has fled from Ukraine, and hotels are supporting army and territorial units with accommodation and meals. We are part of the supply chain,” he said.
He added Ukraine's hotel industry experienced a huge drop in occupancy and average daily rate in 2014 when Russian annexed the Ukrainian region of Crimea.
“After then, Western Ukrainian hotels saw benefits but from domestic travelers, and salaries for hotel employees have risen,” he said.
UHRA is continuing its work, notably on two campaigns apart from opposition to the Russian government, he added.
“Who would have believed Ukraine would stand against the bear?” Loun said, referring to the nickname often used for Russia. “We’re helping place our hotel talent in neighboring countries and are working on a campaign for everyone to donate for future hotel stays, so that the hotel industry can survive today."