When Russia invaded Ukraine in February 2022, LVMH quickly shuttered its Louis Vuitton, Dior, and Bulgari stores in the country, sold its Sephora locations at a loss, and donated 5 million euros to Ukrainian relief efforts. Yet one LVMH asset, the Grand Hotel Europe, has continued operating, serving corporate clients under European and UK sanctions.
LVMH, formally known as Moët Hennessy Louis Vuitton, is a Paris-based luxury conglomerate and the largest of its kind globally. Formed through the merger of champagne and spirits producer Moët Hennessy and fashion house Louis Vuitton, the group oversees leading brands across fashion, jewelry, cosmetics, and wines and spirits.
Operations Continue Despite Sanctions
Owned through LVMH’s Belmond chain, the Grand Hotel Europe legally continues operations under Russian law. VAT records reviewed by Reuters show it accepted payments from sanctioned entities, including Rostec, Rosneft, and Sberbank. Most payments were under $2,000, reflecting room bookings, catering, and event services.
Ownership and Autonomy
The hotel’s ownership has been obscured in public media. Belmond branding was removed from the entrance and the property de-listed from Belmond’s booking site, though corporate filings confirm LVMH retains full ownership. LVMH stated the hotel “operates autonomously and independently” from the chain, with a local team managing the historic property, as reported by Reuters.
A Historic and Prestigious Venue
Situated on Nevsky Prospekt, the five-star hotel has hosted royalty, pop stars, and political elites, including U.S. envoys meeting with Russian President Vladimir Putin. Its 150th anniversary gala in 2025 featured Russian officials and banking executives. Revenue has nearly doubled since 2022, reaching 1.9 billion roubles ($25 million), with a net profit of $5.7 million in 2024.
Strategic Value and Future Prospects
Experts say the hotel remains valuable due to its prestige, prime location, and long-term potential for re-entering the Russian market. Unlike most Western hotel chains, LVMH retained the property, potentially avoiding steep discounted sales and maintaining a foothold in Russian luxury real estate.
Balancing Business and Ethics
Grand Hotel Europe illustrates the complexities multinational firms face when balancing business interests with geopolitical and ethical pressures. Despite the war and sanctions, the hotel continues to generate profits locally while maintaining ties to Russia’s elite.
