BBC News


Page last updated at 12:27 GMT, Friday, 2 May 2008 13:27 UK

Why is Moscow so expensive?

The Magazine answers...

Woman in Moscow tries on a fur coat
Keeping warm the Moscow way

Russians are far from being among the world's wealthiest, yet English fans planning to visit Moscow for the Champions League final have been told to expect hotel bills of up to 500 a night. What makes its capital so pricey?

For two years on the trot, Moscow has topped the list of the world's most expensive city, ousting Tokyo from its long-held spot. So football fans arriving in the Russian capital in three weeks' time expecting prices akin to those pre-perestroika are in for a shock.

Its oil wealth, high inflation rate and shortage of mid-range hotel rooms make Moscow a wallet-busting place to visit - let alone live. Moscow has the highest number of billionaires in any one city, but it also has many people on about $200 a month. Its citizens have this week been protesting against soaring prices.

Inflation topped 12% in 2007
Shortage of mid-range hotels as geared towards business travellers
Room prices hiked for big events
No last-minute deals as room booking typically needed for visa

The city is a business hotspot, so nearly all its hotels are high-end establishments, catering for those on expense accounts. For drinks, for meals, for taxis, "it is London prices," says the BBC's Moscow correspondent, Rupert Wingfield-Hayes.

With an estimated 35,000 beds for 42,000 football followers expected for the Champions League clash, supply is short. The Foreign Office says all the rooms are already booked for 21 May.

And to get a visa, visitors are typically required to first secure a room booking, although Russia has pledged to simplify its requirements to speed up visas for match-day visitors.

This means there is no tradition of the last-minute deals familiar in other countries, where hotels offer knock-down rates on rooms that would otherwise be empty. (These deals make economic sense as even a bargain price more than covers the marginal cost of a room - checking in and cleaning up after a guest.)

Parallel lives

Further pushing up costs for those watching Manchester United take on Chelsea is that Moscow hoteliers typically hike prices for big events, says Stephen Dalziel, executive director of the Russo-British Chamber of Commerce.

Moscow's subway, complete with marble panels and chandeliers
Even the subway is bling

Last year he booked a room for 150, only to find it put up to 450. After some digging, he discovered his visit coincided with an oil conference. He put his trip back a week, and the price came back down.

He describes "two Moscows". The first is geared at the ordinary citizens who use the subway, live in apartment blocks and baulk at the flashy restaurants and shops aimed at the minted moguls - and Western tourists - who earn far more than they do.

If there is one thing Muscovites like to do, it is to flash what disposable income they do have. Daniel Fisher, of the BBC's Moscow bureau, tells a local joke. "Two women in a Moscow bar, both with the same Prada handbag. 'New York,' says one. '$300'. 'Ha!', sneers the other. 'Moscow, $500'."

Question mark floor plan of BBC Television Centre
A regular part of the BBC News Magazine, Who, What, Why? aims to answer some of the questions behind the headlines

Although the city is expensive for expats and tourists, the idea that a pint will cost 4 is nonsense, Mr Dalziel says. "The problem for fans going to the game is they're not going to have time, language or interest to dig around a bit."

Tom Hall, travel editor of Lonely Planet travel guides, says those keen to watch their roubles will struggle. Accommodation will take up the lion's share of their spending money, but the extensive and "sublimely beautiful" subway system is good value, and there are canteen chains that offer cheap eats.

"It's simply not a bargain destination," he says.

Below is a selection of your comments.

This is crazy, an all England final held in Moscow, a totally uneconomical and unecological move. It should be moved to Wembley and cut down on the "carbon footprints"
Sharon Palmer, Egham, Surrey

Also Russia has a dual "tourist" price system where foreigners pay a higher rate that locals for hotels, train tickets, flights and museum admissions.
KryssTal, London

Having visited Moscow on several occasions with work, I can vouch for the rip-off culture the city lives on. Just compare the prices of taxis - I took a taxi from my hotel to Red Square with a local and it cost about $5. The same journey back, but without the local, cost me 5 times that. Good luck to the footy fans - you may need to remortgage your house before you go.
Sy Haze, Reading, UK

I work in Moscow and am going to the football. It is so expensive that I have taken to eating my toenails for breakfast, as i cannot afford a croissant.
Paul Smith, Moscow

Us Man Utd fans have got lots of dosh, so no worries BBC.
Ed Blaney, Salford UK

Oh boy, tell me about it. I went to Moscow last month for an interview with Microsoft. At the end of my one-day visit, my reimbursement claim with Microsoft stands at $450 (excluding the $450 room that was booked by them). And I thought Dubai was costly.
Sriram, Dubai

If you take the time and effort to find somewhere less touristy, prices are way lower than London. It's no different to any other tourist destination - tourist areas charge tourist prices. Go a little off the beaten track, do a bit of research and you can find great food, great service and great prices. Hotels too (except I'm sure, as with the majority of other cities around the world when a major event is being hosted) can be found at reasonable prices - but if you want a decent level of accommodation don't go lower than 3*. As for beer at 4 as reported? Well, maybe in the Ritz. I managed to find it at less than a pound a pint, even near the Kremlin. Don't believe everything you hear - Russia's not that bad.
Matt, Didcot

My advice for fans without a bed in Moscow is get an overnight train somewhere (soft class rather than hard) and return next morning. Public transport there is cheap as chips and warm.
David Thomas, Southampton

This all seems very appropriate as the only fans that will be able to afford a ticket for the match itself along with the flight and hotel costs are probably going to be the kind that have plenty of money left over anyway. It's tragic that football has become so much about money, with two of the richest clubs in the Premiership having made it to this final. The clubs' original and hard-core fans won't be able to attend, but one doubts the clubs will care too much, as their new acquired super-rich fans will be able to attend (if only to say they were there, rather than because they actually want to see the teams play).
DS, Croydon, England


The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific