By Korston Group
By Korston Group Sochi-World - Scope SOCHI OLYMPIC DEVELOPMENT Sport Complexes Hotel & Convention Entertainment Infrastructure Olympic Village Sochi 2014 Winter Olympic Sochi-World Sport Complexes Hotel & Convention Entertainment Infrastructure Sochi-World Worldwide Tourist Destination Olympic Village Sochi-World - Timeline 2010-2013 Planning Sochi 2014 Winter Olympic Sochi World Worldwide Tourist Destination SOCHI OLYMPIC DEVELOPMENT IOC Compliances General Management Sochi-World Logistics Sustainability Long Term Feasibility Support (Hotels, Resort) General Management Sochi-World Goals – Mission • Create Sochi-World as a world wide Exhibition, Convention and Leisure Tourism Destination • Supporting Sport events beyond 2014 Winter Olympics • Protection asset value • Return on investment Sochi-World Goals - Vision • Became the Leading European Convention Exhibition, Sport and Entertainment Destination: – 10 Top International / European Sport Events per year. – Host National Sport Events and Championships – 35 World Exhibition per year. Total 3 million visitors. – One million Convention delegates per year. – One million Room nights. Sochi-World Goals – SWOT Analysis STREANGTH • All year destination • Winter sport & summer sport destination • Established VIP and official vacation destination OPORTUNITIES • Russians favor for an own top truism destination • Russia growing outgoing tourism market • Olympic Games helps to create international brand WEAKNESS • Unstable weather • Underdeveloped • City and regional infrastructure THREATS • Too far from European center • Visa regime • Instability in the Caucasus Region Sochi-World Goals – SWOT Analysis STREANGTH • All year destination Duty Free Zone • Winter sport & summer sport destination • Established VIP and official vacation destination OPORTUNITIES • Russians favor for an own top truism destination • Russia growing outgoing tourism market • Olympic Games helps to create international brand Single Management Company WEAKNESS • Unstable weather • Underdeveloped destination • City and regional infrastructure Integrated Infrastructure Gaming Zone THREATS • Too far from European center • Visa regime • Instability in the Caucasus Region Visa Free Zone Sochi-World – Strategy • • • • • Integrate infrastructure Single management company Duty Free status Visa Free regime Gaming zone Strategy – Integrate Infrastructure • Olympic Area – Sport Stadiums, Circus • Resort Area I – Hotels (3*): 2100 rooms, family entertainment (Aqua park, Amusement Park, Shopping) • Resort Area II – Hotels (4*, 5*) 2400 rooms, Convention space (20’000 m2) & Exhibition Center (40’000 m2) , SPA, Shopping, Casinos • Common Infrastructure – Internal transportation system CO2 emission free – Supporting services: laundry, central warehouse, etc – Engineering systems (autonomy): electro-generation, boiler, etc Strategy – Integrate Infrastructure Resort Area II Olympic Area Resort Area I Strategy – Single Management Company • Manages all the facilities and staff – Runs the hotels, convention, exhibition and entertainment – Supports sport events • Commercializes the facilities – Operates (hotel, entertainment, convention) – Rents facilities (shopping, sport) – Marketing (promotes and advertize) • Provides Security and Safety and Regimes • Ensures technical and engineering work Sochi-World Strategy – Duty Free Status • Applies to all Sochi-World territory • Entitles retail selling only (no wholesale) • Has a similar regime as in international airports • Custom controls in the accesses • Possibility of including or excluding the Olympic Area from the free zone Sochi-World Strategy – Visa Free Status • Applies to all Sochi-World territory • Migration check-points at all accesses • Foreign citizens can come without visa direct from Airport transit area by special transfer • Russian and CIS citizens go in and out with internal or external passport • Foreign citizens with visas can come or go according to their visa statuses • Russian Consular officer on duty on the territory • Possibility of including or excluding the Olympic and Resort I Areas from the free zone Strategy – Gaming zone • Gaming zone to be crated in part of SochiWorld territory – Excludes Olympic and Resort I Areas • All gaming operated by Sochi-World Management Company • Compliances with law – 18 y. o. – Possibility of exclude compulsive gamers by court order. Strategy – complex approach Strategy Impact in Image Impact in Visitor Count Impact in Revenue Integrated Infrastructure Sochi-World perceived as one Destination Increases total headcount, Maximizing multiple use Investment Savings Up to Increases up to 10%, 15% more by 40% Operating savings 5% Single Management Stronger Promotion of the brand, by consolidating marketing resources Up to 25% more, by avoiding price dumping Impact in Cost Savings up to 10% by pooling resources Impact in Profit Increases by 230% (reduces pay back period three times) Strategy – exploiting opportunities Strategy Impact in Image Impact in Visitor Count Impact in Revenue Duty Free Zone Positive associations “modern” “special” “international” Increase Local Up to 23% Up to 70% Visa Free Zone Positive associations “visitor friendly” “international” Increases International Up to 30% Up to 50% Up to 80% Up to 300% Gaming Zone Impact in Cost Impact in Profit Sochi-World - Management Company proposal • Korston Group is ready to form, finance and support the creation and operation of SochiWorld Management Company Korston Group – Highlights • • • • • • More than 1000 Rooms under management More than 20’000 m2 Convention space 25 Restaurants 40’000 m2 in Entertainment Center 100’000 m2 Shopping Centers 600’000 m2 Under development in Russian Regions • Shareholder of Nizhny Novgorod Trade Fair • Employees: 1’500 (3’500 before July 1st 2009) Korston Group – Management Team AREA Years Experience Anatoly Kuznetsov President (Russia) 30 Entrepreneur: Hotel, Casino, Trade, Retail, Entertainment, Development, Construction Lisandro Platzer (Argentina) Strategy 15 Executive: MBA, Hotel Chains, Development, Casino, Strategy, Consultancy, IT Hans Stohs (Austria) Business Development 40 Executive: Development, Hotel, Congress, Resorts, Over 30 openings in 19 countries. Clive Tilley (UK) Gaming 20 Entrepreneur: Gaming, Hospitality, Entertainment Alain Bourdin (France) Finances 30 Executive: MBA, Finances, Banking, IT, Sport Giordano Borri (Italy) Operations 20 Executive: Hotelier, Resort, F&B Congress, Marketing, Sport, Leisure Yuriy Kosenko (Russia) Security 30 Major General (R), Security Services Denis Monolenko (Russia) Legal & 5 administration Legal Counsel, Corporate Governance, Property Rights, Investment Korston Group – Key Factors • Russian Company – Transparency • Required experience – In all the Areas – International – Comparable sizes of operations • Readiness – To deploy required manager team (7 days) – To supply 300 million Rubles to the Management company (5 days) Schedule of Interaction – Three Stages 2010-2013 Planning Sochi 2014 Winter Olympic Sochi World Worldwide Tourist Destination SOCHI 2014 OLYMPIC COMITEE IOC Compliances General Management Sochi-World Management Company Logistics Sustainability Long Term Feasibility Support (Hotels, Catering) General Management Schedule of Interaction – Stage II (Games 2014) Winter Games Sochi 2014 Russian Government Sport Authorities Asset Owners SOCHI 2014 OLYMPIC COMITEE 2014 Winter Olympics Game Administration Accreditations Media Center Transportation Security & Safety Games Marketing Ticket Sales Olympic Village Management Infrastructure Management Korston Group Sochi-World Management Company Hotel Management Logistics F&B Catering Schedule of Interaction – Stage I (till 2013) 2010-2013 Planning Sport Authorities Russian Government Asset Owners Coordination Board Korston Group Sochi-World Management Company Sochi-World Brand Concept SOCHI 2014 OLYMPIC COMITEE IOC Compliances 2014 Winter Olympics Requirements Olympic Objects Planning General Planner Sustainability Logistics Long Term Feasibility Hotels & Other Facilities Planners Sochi-World - Organization Structure Sochi World Worldwide Tourist Destination Russian Government Korston Group Supervisory Board Asset Asset Owners Owners Sport Authorities Sochi-World Management Company Sochi-World Hotel & Conventions Entertainment & Shopping Infrastructure & Security Sport Complexes Next Steps • • • • Government act Management company to be created Management agreement Korston immediately assisting with planning and project management
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