Although The National picked up a state award for excellent service and safety standards, its management said that the 100-year-old Moscow hotel hasn't yet rebounded from a slump triggered by the 1998 financial crisis.

"We are still fighting for occupancy," said Alexander Vorontsov, The National's marketing director, who put the hotel in the same class as Moscow's Baltschug Kempinski and Marriott. "Before the crisis, the occupancy rate [averaged] 80 percent, but today that figure is only 60 percent."

Some 500 businesses competed for this year's federally funded State Quality Award. To be eligible, a company must prepare a 70-page report on its business practices over the previous five years. A six-member panel then examines the report and the business before deciding which companies will receive the honor.

Since the award's inception in 1997, it has been given to 36 companies across Russia; this year, there were 10 winners, officials said. The award is given across a wide range of industries, including metallurgy, education and medicine.

"We are proud to be the first hotel to participate in this award, and also the first one to win," said Kirill Pokrovsky, The National's spokesman, referring to the annual government competition.

The five-star National, which is owned by the city but run as a franchise of the Forte and Le Meridien hotel group, has undergone substantial renovation over the last several years and, as of September, will officially change its name to Le Royal Meridien National.

Under the arrangement with Le Meridien, the hotel recently added a business floor featuring rooms furnished with computers, printers, fax machines and scanners. Other accommodations were redone and equipped with new amenities such as imported Italian whirlpools. The hotel's Moskovsky restaurant was also revamped.

The National is bracing itself for a takeover of the nearby Intourist hotel, possibly by Hilton, a spokesperson said. However, greater concern was directed toward the industry as a whole.

"Our future depends on the tourist business, and although Moscow is not a city-cum-health resort, we hope that tourism in the capital will grow," Vorontsov said.

Le Meridien currently operates two hotels in Moscow and one in Almaty, Kazakstan. Company officials said that it is planning to expand by opening hotels in several large cities in Siberia and the Far East.