Raffles Hotels will leave its mark in the Russian capital with a new namesake luxury hotel set to open here in 2011.

It inked a management agreement on June 15 with Russian firm ALT Corporation, which is bringing the Raffles brand to Russia.

Raffles Moscow will be owned by ALT Corporation and managed by Singapore's Raffles Hotels and Resorts, which has 22 hotel projects around the world.

The hotelier has been eyeing Russia for a 'couple of years', said Mr James Kaplan, senior vice-president of global development at Fairmont Raffles Hotels International, the parent company of Raffles Hotels and Resorts.

"Russia is becoming a very important economic and political powerhouse, and we want to be part of it," he told reporters.

It chose Moscow because the Russian capital is attracting more business travellers and tourists.

Last year, four million people visited Moscow, a 7.5 per cent increase from the previous year.

This has created a growing demand for top hotel accommodation, which is currently in short supply here as several Soviet-era hotels have been torn down to make way for new developments.

One result of the squeeze on hotel rooms is sky-high room rates. Moscow has one of the highest rates in the world.

Raffles Moscow will be pitched right at the top, with room rates starting at around US$800 to S$1,000 (S$1,400) a night.

The average room rate for Moscow's top hotels has grown annually by 18 per cent since 2003.

But Raffles believes its new 130-room hotel in the heart of the city - in the Kitay-Gorod district - will be top of the line.

Mr Vladimir Pereverzev, chairman of ALT Corporation's board of directors, said Raffles represents the 'highest standards of hospitality and service'.

The new hotel will be in a heritage building and is a three-minute walk from Red Square and near top-end shopping centres.