Abkhazian hoteliers claim major Russian firms are undercutting prices to ruin them
Russian companies are taking over Abkhazia
Owners of small hotels in Abkhazia claim that their larger Russian counterparts are engaging in price dumping – artificially lowering prices for their services.
In some large hotels, the price of a room with three meals a day averages around 700 rubles [$8.70] per night.
Caption on the Telegram post says: “This is what dumping looks like. Hotel ‘Russia’ in Gudauta, operated by Biblio-Globus”
This 18-story hotel with suspiciously low prices is located in the Abkhaz city of Gudauta and belongs to brothers Mikhail and Dinarik Sichinava. Over the past few years, the Sichinava brothers have bought up more than ten large boarding houses and sanatoriums, built (or left unfinished) during the Soviet era, and renovated them.
Because of the low prices, their hotels are already nearly fully booked even before the tourist season begins. Meanwhile, other nearby hotels and guesthouses remain mostly empty.
Their owners complain they cannot compete under such pricing conditions. The start of the season is causing them serious concern.
“Not a single tourist checked into my hotel with 18 rooms for the May holidays. Last year at this time, it was at least half full.
Now the earliest booking is for July — and that’s a disaster. A couple more seasons like this, and I’ll be forced to sell the property,” one hotel owner wrote on social media.
But in response to the accusations, the Sitchinava brothers say they have leased their hotels to the major Russian tour operator Biblio-Globus, and it is that company which sets the prices for the travel packages.
If this situation continues throughout the season, many owners of small hotels and guesthouses say they will be forced to sell.
They are calling on the Abkhaz authorities to urgently adopt antitrust legislation to prevent widespread bankruptcies.
“It’s clear that the large hotels have triggered a price collapse to wipe out small local businesses. But dumping also harms the state budget, which will lose significant revenue from the tourist season,” argues the newspaper Nuzhnaya Gazeta, calling for immediate action.
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