by Sasha Kharchenko

LVIV — Britain's InterContinental Hotels Group (IHG) is expanding its Ukraine investments, planning to open in September a five star Crowne Plaza, a short walk from this city's historic opera house. With this opening, IHG adds to its Ukraine portfolio, which already includes an InterContinental and a Holiday Inn, both in Kyiv.

Some 2.6 million visitors came Lviv last year -- more than three for each of its 723,000 residents. They were drawn by cobblestone streets, a vibrant cafe scene and well-preserved architecture reflecting a varied history and the different countries that ruled the region.

Crowne Plaza targets business travelers

IHG's choice of brand for Lviv also reflects the growing numbers of foreign investors coming to the largest city in Western Ukraine, a region that is benefiting from the one year old free trade pact with the European Union. Crowne Plaza brand is targeted to business travelers. Starting in October, Ryanair will offer the first flights to Lviv from London and Berlin.

Lviv’s Crowne Plaza will be the reconstructed Grand Hotel. It faces the statue of 19th century poet, Taras Shevchenko.on Prospekt Svobody, the city’s most popular boulevard for strolling, The Grand Hotel, an Empire style landmark opened in 1893 and closed three years ago for the renovation.

Lviv's late 19th century Grand Hotel will reopen in September as a Crowne Plaza (photo: Sasha Kharchenko)

It opened when the city was the capital of Galicia, the easternmost province of the Habsburg Empire. With periods of Polish and Soviet rule now behind it, the hotel underwent several renovations and changes of ownership since Ukraine's 1991 independence. Before the current reconstruction, it was a four-star hotel.

$30 million Investment

The hotel now is managed by Grigory Kozlovsky, a local businessman and owner of a tobacco plant. Together with the IHG, Kozlovsky invested about $30 million in the reconstruction, according to the Ukraine Turmnaround Real Estate Fund. Experts believe it could take 10 to 12 years for that investment pay off.

Once open, the hotel will double its rooms, from 63 to 120, and add luxurious facilities, like a 2,500 square-meter spa, a sport pool, gyms, three breakfast halls, a 300-seat conference hall and a casino. Prices are unlikely to go up very much from its previous four-star level.

“The minimum price will be $100-110, it's only 10% above the highest current rate in the Lviv hotels,” Kozlovsky said.

The British investors say that they chose Lviv because of the city’s growing popularity for tourism and business.

“That trend is continuing -- business activity is growing as well. Another reason is the proximity to Europe,” said Aaron Libinson, a vice president of InterContinental Hotels Group for CIS development. The Crowne Plaza brand is often targeted to business travelers.

Over the last few years, two large hotel chains have come here: Ramada, owned and operated by the American Wyndham Worldwide; and Ibis, owned by French multinational AccorHotels.

Overall, Lviv has 136 hotels. Two are considered five-star: Nobilis ($110 for a double room) and the Citadel ($140 per double).

Last year, Lonely Planet placed Lviv among the top five European tourist destinations.

Galyna Malets, head of the Lviv City Council’s tourism department, expressed pride at 2016 surge of tourists. “It’s one-third more than previous year,”

The Crowne Plaza should attract well-to-do visitors.

“The fact that a hotel chain of this level comes to Lviv is a great promotion for the city”, said Andrii Moskalenko, Deputy Mayor of Lviv responsible for development.

Room prices rise

Lviv has indisputably become more expensive for tourists. Hoteliers have raised room rates 20-40 percent.

“Prices were increased as we got more bookings. Two years ago, the average room cost between $40-50 per night, now it is $50-70,” said Natali Bryndalska, a general manager of the 18-room boutique hotel “Rudolfo.”

Another hotelier, Oleksandra Gagarina, deputy director of the 165-room 4-star Hotel Dniester, said price levels clearly depend on demand.

“An average price at our hotel is $80 -- off-season, we lower room rates,” she said, “From November until mid-December we face a 10 percent drop in tourist visits, and in February there’s a 30-50 percent decrease.”

But during peak tourist season, prices climb back.

Gagarina suggests that Lviv and Odesa have replaced Crimea as the go-to domestic travel destinations after Russia’s 2014 annexation of the peninsula. What Lviv lacks in oceanfront property, it may make up for in culture and charm.

“Lviv was founded 760 years ago and it has the greatest concentration of architectural treasures in Ukraine,” she said,

For comments and news tips, please email UBJ Western Ukraine Correspondent Oleksandra Kharchenko at sasha.kharchenko@theubj.com

Photo: The four-star Grand Hotel is under reconstruction. In September, it is to reopen as Ukraine's five-star Crowne Plaza (Credit: Oleksandra Kharchenko)

Updated March 19, 2017