YSU Hotel Operates at a Loss for Years While Director's Own Hotel Thrives: YSU Restart

According to Restarttimes.am, when ineffective management coincides with corruption, the result is the situation we see at Yerevan State University (YSU). The YSU hotel in Tsaghkadzor began to be discussed following partial changes in the composition of the YSU Board of Trustees. Board Chairman Gevorg Muradyan addressed the issues related to the hotel during the very first meeting.

The main issue is that the hotel has been operating at a loss for years, meaning it has only received investments and subsidies instead of making money. A vivid proof of this claim is a document outlining the financial inflows and outflows of the hotel. The data recorded since 2016 clearly show that millions of drams have been allocated from the YSU budget to the Tsaghkadzor hotel, while the hotel has only wasted this money, failing to record even a zero performance in any year.

At first glance, it seems that this is merely the result of poor and failed management. However, a deeper investigation reveals numerous other facts. The former director of the hotel, Hrant Mirzoyan, who managed it for many years, also has considerable experience in running hotels. Yet, alongside this experience, during his tenure at YSU’s hotel, he has owned a hotel named 'Alva' in Tsaghkadzor, which has consistently prospered.

Hrant Mirzoyan has simultaneously served as the director of both the 'Alva' Hotel and YSU’s Tsaghkadzor hotel. However, the situation has turned out such that the YSU hotel has constantly relied on funds transferred from the university budget without ever generating profit, while Mr. Mirzoyan's own hotel operates efficiently and generates profit.

We assert that the claim of profitability is justified, as no entrepreneur is foolish enough to run a loss-making organization for years. At any rate, it is not officially registered as a charitable organization in the e-register.am; otherwise, one might think that Mr. Mirzoyan is a philanthropist spending money from his own pocket to provide citizens with the opportunity for pleasant vacations.

The assertion that 'Alva' Hotel belongs to Hrant Mirzoyan is entirely correct; its irrefutable proof is published data on the official e-register.am website.

This raises the question: if Mr. Mirzoyan is a poor manager, and the continuous funding from the YSU budget results solely from disgraceful management, how can it be that his own hotel justifies itself and brings him profit? Unfortunately, such corruption is difficult, if not nearly impossible, to expose, and there have been no revelations after various studies conducted by the RA State Revenue Committee in YSU last year.

Let's delve a little deeper into the individual of Hrant Mirzoyan. He is the brother of the former mayor of Tsaghkadzor, Garun Mirzoyan. Various news services have repeatedly addressed this circumstance. However, we will limit ourselves to just one reference connected to this matter—Armdaily.am. Garun Mirzoyan's name has been continuously linked with that of the second president of Armenia, Robert Kocharian, and various legends are woven around the public narrative about his name.

Recently, former rector Aram Simonian dismissed Hrant Mirzoyan, who subsequently filed a lawsuit against Simonian claiming that his dismissal was unfounded and he now wishes to return to his previous position. It remains unclear why Hrant Mirzoyan considers his dismissal unfounded when he couldn't achieve even a zero-performance level at the YSU Tsaghkadzor hotel in any year.

During Mr. Mirzoyan's tenure, in 2016 alone, 34,639,550 drams were required from the YSU to maintain the hotel. This is the additional amount needed for subsidies, meaning the hotel 'went into the minus' by this much. Subsequently, in 2017 and 2018, YSU required 27,654,488 and 19,055,323 drams, respectively, to maintain the hotel. In total, over these three years, the hotel wasted (went into the minus) 81,349,361 drams instead of generating profit.

Why do we emphasize that it is the waste of student funds? Because about 70 percent of YSU's annual budget comes from tuition fees paid by students in the paid system. Therefore, this circumstance proves that it is indeed students' money that is being wasted. If we attempt to address the remaining 30 percent of budget formation, we can mention that 20 percent of that is also allocated by the state primarily to subsidize tuition for students studying in the free system.

Finally, we would like to address the current administration's behavior at YSU. In the process of collecting this data, we sent several inquiries to YSU, one of which requested financial inflows from the YSU Tsaghkadzor hotel broken down by categories. This means that the data provided to us should specify not only the total amounts received from services but individual services separately. For example, income from business trips, cash payments, and so on. The purpose of such an inquiry was to show the amount received from cash payments from hotel visitors for the years 2016, 2017, and 2018 and compare it with the cash payments received in the first five months of 2019, which would reflect a significant difference in the context of cash inflows.

According to our data, the current administration has already earned more from cash payments received from guests than was done in many previous years (over the course of one year). However, due to the dishonest cooperation of the current YSU administration, we are unable to publish this data. We will now send the next inquiry to YSU's management, requesting data on cash payments made by visitors to the YSU Tsaghkadzor educational hotel over the last four years, from which it will become clear that cash payments increased after Hrant Mirzoyan's dismissal.

Thus, when poor management is aided by negligent behavior and corruption within institutions, the ones who suffer are the students, many of whom, given the socially challenging situation in the country, struggle to pay their tuition fees, often at the expense of their own and their families' well-being.