There is a company called "Best Eastern" (the name of which I can only believe was meant to capitalize on the well established reputation of "Best Western") which purchased many of the old Soviet era hotels in several countries.
Since they're WERE only a limited number of hotels - and not much large scale construction was happening a few years back (no new big hotels anyway) these hotels almost monopolistically dominated the market. Foreign people had little choice but to pay ridiculous prices even just a few years back.
Its down right funny to have to pay upwards of $130 dollars a night for a hotel room in a country where a typical person doesn't make that much in a MONTH. And these hotels, mind you, were far beneath western standards, with tiny rooms, often having two twin beds bolted to the walls (without even box springs, just a platform for the matress), no dependable hot water. etc. etc.
But few business or government people from outside the country (and that was after all - the target customer) were comfortable renting apartments and there was no other options. And these hotels, by the way, make no apologies for charging people from "rich countries: exhorbinant rates - much more than they charge locals, or even people from other FSU countries. There WERE (and still are) seperate rates depending on where you were from.
This price gouging gave rise to two responses. #1. The private apartment rental industry. #2. The much-less-expensive small "private hotel".
Entreprenuers have purchased lots of apartments which they now rent out. They also speculate on the value of these apartments increasing so they make money both ways. Some of the apartments available for rent are simply offered by individuals who are willing to vacate temporarily (they have somewhere else that they can go) in return for some much appreciated cash.
The small "private hotels" (sometimes called business hotels, or villas) are very nice modern properies, often consisting of fewer than ten units, and they are the "family business" of some enterprising locals. The one I tend to stay in in Moldova is great and costs less than HALF what you would pay for a dumpy room in an older style hotel.
DO a little research on the internet and you can find great opportunities but for gawd sake stay away from those ancient run-down over priced hotels.
Yeah that sounds a little ridiculous. We stayed at the Kichkine hotel in Yalta our balcony overlooked straight down to the black sea. Awesome view. for 130USD for a day, but that also included two meals at the hotel. Really nice place. I agree with Jet and others the best route is the private apartments, thought The Kichkine had a bedroom living room and a large bathroom with a bidet! I had to do the Crocidile Dundee routine there. We could have done better on price with some Private apartments in Yalta but wouldn't have had the view.
The place I stay at in Moldova is a private hotel, which has a big bedroom, a livingroom, office sort of area, and a nice marble bathroom ALSO with bidet - and its around $60 per night with one HUGE meal served in bed to you if you want it. Discounts are available with longer stays and when they get to know you (I pay a lot less).
The place I stay also has full time security and a "doorman" who will call a taxi for you and carry your bags. You don't get that with an apartment.
The CHEAPEST of the big hotels cost twice as much for which you will get a room lower than the lowest Motel 6.