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Billionaire Potanin Bets on World-Class Ski Resort

April 08, 2013

Rosa Khutor Resort

The Rosa Khutor at dusk. The resort is two hours away from Moscow by plane. Photographer: Shaun Botterill/Getty Images

Visitors to Krasnaya Polyana, a skiing area in southern Russia that will host the Sochi Winter Olympics next year, could be forgiven for feeling like they’ve been stranded in a building site.

While contractors race against time to complete the Olympic facilities, the clang of metal resounds and dust swirls around the muddy terrain as skiers clamber past security barriers to catch a gondola lift operated by Russia’s state-run lender OAO Sberbank at the Gornaya Karusel resort.

Billionaire Vladimir Potanin, who’s spending $2.2 billion on the nearby Rosa Khutor resort, promises that such impressions will be a distant memory when Krasnaya Polyana offers as much as 200 kilometers (120 miles) of connected slopes a few years from now by combining three separate ski zones. That’s one-third the size of France’s Les 3 Vallees, which bills itself as the world’s biggest skiing area.

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“It will be complete happiness for tourists,” says Sergei Bachin, Rosa Khutor’s general director. “The skiing we offer is so superior that we have no shortage of tourists already now and there will be even more after the Olympics.”

With Sochi only a two-hour flight from Moscow and on the same time zone, Muscovites can take a weekend skiing break there, which they couldn’t do by flying to Europe. Once the Olympics are over, President Vladimir Putin and Prime Minister Dmitry Medvedev’s favorite winter sports destination will also benefit from a brand-new train line that will whisk visitors straight from the airport to the slopes in 40 minutes.

Spring Thaw

Closed for test competitions for two months, Rosa Khutor reopened in late March only to bar all but its hotel guests and season pass holders from skiing to store snow for the Olympics. Determined to get a last chance to test the slopes before the spring thaw, it seemed worth paying the $50 daily ski pass even though only a fraction of the skiing area was open.

My 10-year-old daughter who took a lesson with a private instructor, priced at $100 for two hours, was impressed. An individual skiing lesson she had a month earlier in France at a cost of $115 for two hours had taught her virtually no new techniques compared to the Russian instructor, she said. Group classes are available if there is enough demand.

Despite state-of-the-art lifts from Doppelmayr of Austria, Rosa Khutor lacks the efficiency of long-established European resorts, it’s expensive to rent equipment and the food available on the slopes is disappointing.

Bureaucratic Wait

Getting ski equipment and ski passes involved a long bureaucratic wait and the skis, boots and helmet that I hired for my daughter cost almost twice as much as in France’s Serre Chevalier -- $120 for three days. For an adult the cost would have been $195.

The canteen-style restaurant that was open that day -- operating at reduced capacity -- had only chicken thighs and sausages as main courses and no alcohol other than beer and mulled wine.

The next day, as the sun was shining, Sberbank’s Gornaya Karusel was working and it seemed a better bet as it didn’t need to prepare the slopes for Olympic events. Still, even at higher altitude where the snow was still plentiful, they closed some of the lifts.

The day after, in spite of more cloudless weather, the entire resort unexpectedly shut at 12 p.m. because of avalanche risk, requiring people who had paid for day ski passes to leave. It was entirely closed from March 11 to 18 for “technical reasons.”

Press Center

Sberbank, whose annual revenues exceed those of Bulgaria, won’t reveal how much it is spending on the Olympics. It’s building a press center that will host journalists covering ski jump events half-way up the mountain.

An entirely new tourist development is also being constructed at ground level, to add to the two separate apartment and hotel complexes at Rosa Khutor at low and mid- altitude.

For those who need to escape the frenzy and remember the way Krasnaya Polyana was before Russia won the right to stage the Olympics, a place of refuge can be found at British Banya.

Opened eight years ago by British-born James Larkin, it offers an exotic mixture of a traditional Russian steam bath with a Japanese-style garden. You can relax outside looking at the peaks in a giant cauldron with 40 degrees centigrade water after being smeared with honey and doused in kvas, a Russian fermented drink made from bread. It’s not a cheap pleasure, though, as the cost for three people is more than $600 for three hours.

Olympic Bid

Rosa Khutor’s owners are optimistic that their modern skiing facilities, five times larger than what was originally on the drawing board before Russia’s Olympic bid succeeded, will prove commercially successful.

“Our resort is much better than many European resorts,” says Bachin. “We toured leading European and U.S. skiing resorts and took the best of what we saw.”

A nearby resort called Laura run by OAO Gazprom, the state- owned gas export monopoly, which should be linked to Rosa Khutor within three or four years after the Olympics, is even open at night with the use of giant floodlights.

Wealthy Russians seem to like Russia’s first world-class skiing area. Already there is a waiting list to buy premium- class apartments at Rusa Khutor with uninterrupted mountain views, which cost $12,000 a square meter.

Foreigners, though, will probably only make up 10 percent of visitors, Bachin says. French and other Europeans who used to flock to Sochi for helicopter skiing, allowing them to go down pristine mountain-top slopes, are now heading to Kyrgyzstan and Uzbekistan in former Soviet Central Asia, where a week’s vacation costs $3000 a head.

(Henry Meyer writes for Muse, the arts and culture section of Bloomberg News. The views expressed are his own.)

Muse highlights include Manuela Hoelterhoff on arts, James Russell on architecture and Scott Reyburn on the art market.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.


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