World ochi

By Korston Group

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Sochi-World - Scope

SOCHI OLYMPIC DEVELOPMENT

Sport Complexes

Hotel & Convention Entertainment Olympic

VillageInfrastructure

Sochi-World

Sport Complexes

Hotel & Convention Entertainment Olympic

VillageInfrastructure

Sochi 2014Winter Olympic

Sochi-World Worldwide Tourist Destination

Sochi-World - Timeline

SOCHI OLYMPIC DEVELOPMENT

Sochi-World

Sochi 2014Winter Olympic

Sochi World Worldwide Tourist

Destination

2010-2013Planning

IOCCompliances

General Management

LogisticsSustainability

Long TermFeasibility

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 AnalysisSTREANGTH• 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 AnalysisSTREANGTH• 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 destination• City and regional infrastructure

THREATS• Too far from European center• Visa regime• Instability in the Caucasus Region

Integrated Infrastructure

Gaming Zone

Duty Free Zone

Single Management Company

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

Olympic Area Resort Area IResort Area II

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 Sochi-World 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 inImage

Impact in Visitor Count

Impact in Revenue

Impact in Cost

Impact in Profit

IntegratedInfrastructure

Sochi-World perceived as one Destination

Increases total headcount, Maximizing multiple use

Up to 15% more

Investment Savingsup to 10%,Operating savings 5%

Increases by 40%

SingleManagement

Stronger Promotion of the brand, by consolidating marketing resources

Up to 25% more, byavoiding price dumping

Savingsup to 10%by pooling resources

Increases by230%(reduces pay back period three times)

Strategy – exploiting opportunities

Strategy Impact inImage

Impact in Visitor Count

Impact in Revenue

Impact in Cost

Impact in Profit

Duty FreeZone

Positive associations“modern” “special”“international”

Increase Local

Up to 23% Up to 70%

Visa FreeZone

Positive associations “visitor friendly”“international”

Increases International Up to 30% Up to 50%

GamingZone Up to 80% Up to 300%

Sochi-World - Management Company proposal

• Korston Group is ready to form, finance and support the creation and operation of Sochi-World 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 TeamAREA Years Experience

Anatoly Kuznetsov(Russia)

President 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)

BusinessDevelopment

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 & administration

5 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

SOCHI 2014 OLYMPIC COMITEE

Sochi-World Management Company

Sochi 2014Winter Olympic

Sochi World Worldwide Tourist

Destination

2010-2013Planning

IOCCompliances

General Management

LogisticsSustainability

Long TermFeasibility

Support(Hotels, Catering)

General Management

Schedule of Interaction – Stage II (Games 2014)

SOCHI 2014 OLYMPIC COMITEE

Sochi-World Management Company

Winter Games Sochi 2014

Security & Safety

2014 Winter OlympicsGame Administration

F&B Catering

Hotel Management

Logistics

Korston Group

RussianGovernment

SportAuthorities

Asset Owners

Infrastructure Management

Games MarketingTicket Sales

Transportation

Olympic VillageManagement

Accreditations

Media Center

Schedule of Interaction – Stage I (till 2013)

SOCHI 2014 OLYMPIC COMITEE

Sochi-World Management Company

2010-2013Planning

IOC Compliances

2014 Winter OlympicsRequirements Long Term Feasibility

Sustainability

Logistics

Soch

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Bran

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Korston Group

RussianGovernment

SportAuthorities

Asset Owners

General PlannerOlympic Objects

PlanningHotels & Other

Facilities Planners

CoordinationBoard

Sochi-World - Organization Structure

Sochi-World

Sport Complexes

Hotel & Conventions

Entertainment& Shopping

Infrastructure& Security

Sochi-World Management

Company

Korston Group

Asset Owners

RussianGovernment

SupervisoryBoard

SportAuthorities

Asset Owners

Sochi World Worldwide Tourist

Destination

Next Steps

• Government act• Management company to be created• Management agreement• Korston immediately assisting with planning

and project management