Gone are the days of sky-high hotel rates that reached higher than most other European capitals. To keep occupancy rates up, Moscow hotels are learning that they'll have to start bargaining. And bargain they have.

Occupancy rates at midrange and high-end hotels averaged 50 percent in March, down from 65 percent to 66 percent over the same period last year, while occupancy rates averaged 60 percent for the first quarter as a whole, said Igor Roganovich, associate director of strategic consulting at Knight Frank.

Though the data are getting progressively better over the high season -- late May to early June -- hotels have gotten creative in their efforts to entice businessmen and tourists to travel, said Marina Usenko, executive vice president at Jones Lang LaSalle Hotels.

"Hotels until recently were very arrogant about setting their prices very high and expecting the customer to pay retail prices," Usenko said. "Now, corporations are renegotiating their contracts and saying, 'We want lower rates and more perks and services.'"

While Moscow's five-star hotels could afford to charge as much as $850 per night just a year ago, now prestigious locations are asking for $525 on average.

"In general, the hotels kept their rates in rubles at the same price as last year, which means an actual discount of 20 to 30 percent because of the devaluation of the ruble," Roganovich said.

While Moscow's heavily business-oriented traveler base lacks the leisure guests that continue to drive occupancy rates in London and Paris, the city's perpetual shortage of hotel rooms has put it in a better position than some of its smaller Western neighbors.

There are 67 percent fewer hotels per capita in Moscow than in London and Berlin and 83 percent fewer than in Prague, according to Knight Frank, and overcrowded hotel sectors in places like Budapest and Berlin contributed to declining revenues in March.

In Russia, Moscow is faring better than St. Petersburg, which depends primarily on leisure travel, Usenko said, but hotels still must find ways to bring this year's figures closer to last year's.

"Hotel operators are focused on getting big groups, sports teams and tour groups to support occupancy rates and are offering big discounts on accommodation and conferences," said Veronika Kartashova of Cushman & Wakefield. "In some cases, the groups don't even pay for the actual room fees."

Le Royal Meridien National Hotel, a member of Starwood Hotels & Resorts, is giving discounts of 35 percent to 50 percent off the retail price, depending on the hotel's occupancy, and offering a fixed 65 percent discount for groups of more than 10 people, the hotel's spokeswoman Anna Amosova said.

Having seen the number of business visitors fall 30 percent and the number of leisure travelers drop 40 percent, the National has dropped prices on rooms and conferences, she added.

While few major corporations have been able to eliminate business travel completely, most have made some effort at least to cut back, Roganovich said.

Manfred Barnett, a guest at Hilton's Leningradskaya Hotel, said his employer Barclay's had issued a blanket ban on all but essential travel -- a decision that could only be made by the company's chief financial officer.

Traveling for business, Barnett said he and his colleagues had been given a corporate discount. And room availability has increased as well, leaving Barnett with more customer choice than in previous years, when he spent most of his time traveling to Africa.

"Last year, I had difficulty getting into my preferred hotel in Uganda," he said.

For MT Guests at the Leningradskaya Hotel have seen increased room availability.

Emptier hotels mean greater choice for guests, said Tom Flanagan, regional director of Rezidor Hotel Group, which operates the Park Inn and Radisson Hotel brands in Moscow.

"Less pressure on the market is reflected in more rooms available and more choice for the customer, " he said.

Besides suffering from a loss of business guests, hotels are also seeing corporations book fewer, if any, conferences -- formerly a major source of revenue.

"The conference business has taken a major hit because it's a luxury corporations can do without now," Usenko said. "All these endless conferences that we saw over the past couple of years are now getting rescheduled or postponed for a year to see how things are, or people just can't afford to pay for them."

"All the hotels are experiencing this," she added.

Amosova said the number of conferences at the National had dropped 20 percent compared with last year.

"To support our conference facilities, we had to seriously reduce the rates," she said. "Last year, we used to sell the three-course menu for private events at 1,700 rubles, now the rate is 1,290 rubles ($41). The banquet rate per person last year was 2,300 rubles -- now it's only 1,600."

As conferences were a major revenue earner for hotels, now many are being forced to get creative on the cost-cutting side, Usenko said. "The hotels are trying to either scale down the staff numbers or not replace staff if people leave," she said.

Four-star hotels averaged a 50 percent occupancy rate in January, compared with 39 percent for five-stars, and while some independent hotels might close up shop this year, a number of chains have been doing just fine -- at least during certain periods of the week, Usenko said.

"On certain days, the centrally located hotels might be 80 to 90 percent occupied," she noted.

Sitting in the Marriott Grand's crowded bar lounge on Tuesday night, a businessman from Manchester who declined to give his name said he had not noticed a drop in clientele in business destinations ranging from Moscow to London.

"If I look around, I ask myself, 'What recession?'" the man said. And he promptly turned back to the colleague sitting next to him -- and his nightcap.

Jessica Bachman contributed to this report.