Market overview: hospitality. How the development of the tourist complex has changed the hotel market in the capital Key analysis parameters

The hospitality business has traditionally remained a highly demanded service with a highly segmented focus. Only in this area can you find a wide variety of quality and service. The annual analysis of the hotel market confirms the always available business capacity, at least for those who are ready to enter an uncompetitive environment. At the top of the ratings as always large companies, increasingly acquiring the features of network retailing with aggressive promotion methods.

Starting your own business in the hospitality sector is a long-term investment. For this reason, novice businessmen need to know the intricacies of the hotel business, to have statistics on the near horizon.

🔥Who are the competitors

The high intensity of the hotel business is presented in regions of high tourist traffic. These are the federal capitals Moscow, St. Petersburg, and now Simferopol. There are always a lot of guests and business travelers in the resort area - Sochi, Kaliningrad and the Black Sea coast. The line of business is no less in demand in industrial centers - Yekaterinburg, Krasnoyarsk and Novosibirsk. A tenth of the regions awaiting customer flow, welcoming guests who have come to various festivals or to study cultural heritage.

It is too early to talk about the chain retail of the hotel business in Russia. Each region has its own leaders. Meanwhile, in the analysis of the hostel market by leading rating agencies, four brands are increasingly singled out: Azimut, Heliopark Hotel, Russian Hotels and Intourist group of companies. The research has not yet covered a fairly large dynamically developing chain of hotels and hotels "Amaks", represented in 22 Russian cities.

Business development in the place of presence of one of these brands will be very difficult, since these companies rely on existing practice, professional staff and modern instruments promotion.

If we turn to studies of a narrower segment, for example, to analyze the Moscow hostel market, then in the capital the market capacity and business liquidity always remain at their best. In 2012 alone, this market niche showed a fourfold increase in terms of key indicators. In the year 2016, Moscow had a fund of 52,000 rooms. The capital met the 2018 World Cup with 950 hotels. And this, not counting the owners of vacant apartments, who took an active part in the placement of the incoming stream. The price tags are known to all Russians firsthand. For 2019 and in the future, Moscow will have a jubilee arsenal of various kinds of hostels and hotels in the amount of a thousand.

đź’ĽComposition of participants, business strategies

The business structure remains quite diversified. Following the example foreign countries the Russian consumer approaches the choice of the number of rooms quite practical - for the available budget. The composition of participants and the level of service for 2019 is already being adjusted according to the results of the completed program "Development of domestic and inbound tourism in the Russian Federation" for 2011-2018. Also, when compiling the rating, the requirements of the mandatory classification of hotels with more than 15 rooms, which are mandatory from 2019, were taken into account.


Analysis of the hotel market by type of room stock reveals different consumer preferences and compliance with the level provided by entrepreneurs. It is rather difficult to understand the detailed classification, therefore organizers of mass trips and posted workers often resort to it.

In Russia, the statistics of the hotel market is supported by all types of services, while enterprises choose a unified strategy for “packaging” tariffs. This different kinds number of rooms at one point of sale, the presence of additional services, paid separately. A prime example of such service is food or treatment (in sanatoriums). Thus, the consumer reserves the right to choose the set of services he needs, which is available to him according to his needs and budget.

🔝Potential for increasing customer flow, problems

According to statistics, the hotel business in Russia lags far behind the world level. And the point here is not so much in the service as in the skillful management of enterprises. Analytical agencies often point to such a disadvantage as the lack of interaction with obviously related industries, such as tourism and cultural, sports and other mass events... The lack of capacity lies in the low level of readiness to maneuver the service. For example, a group of corporate tourists, before departure, requests a certain number of rooms of a certain level at the place of their future stay. In the absence of a full offer, the company processing the application will be able to provide either part of the need, or risk losing the client altogether. In this respect, the "star rating" of hotels according to the classification has a dual effectiveness.

Considerable success in the industry has been achieved in attracting foreigners. Attraction transport companies for organizing transfers, local authorities and cultural workers proves once again that hotel business works perfectly in a state of symbiosis.

đź’°Business profitability


According to 2018 data, the average occupancy of the room stock was 54%. Such indicators in the industry were achieved thanks to the activity of entrepreneurs and the introduction of a number of government programs. From the point of view of investment attractiveness, the payback horizons of a business are in the range from 5 to 15 years. Despite the obvious profitability of the lacking middle class fund, developers continue to focus specifically on upgrading hotels to the highest class or building new buildings.

The hotel business in Russia remains attractive for both entrepreneurs and investors. Additional industry catalysts are support government agencies and interaction with related businesses.

The brightest Moscow premieres of last year - buildings are being built for Mandarin Oriental, which plans to manage not only the hotel opposite the Kremlin, but also residential residences (an agreement was signed with Capital Group), and the long-awaited Fairmont - the operator will take care of the hotel and apartments on Tverskaya (Vesper ).

Penta Hotels Worldwide - the brand is part of the Rosewood Hotel Group (based in Hong Kong international operator) - opened the first hotel on Novy Arbat, in The Book. This project from Capital Group also has service apartments, but under the management of Intermark Hospitality (the company was created to serve international corporate clients).

Corinthia Hotels Group, owned by IHI plc, announced its entry into the Moscow market. The Corinthia Hotel & Residences in Moscow on Tverskaya 10, plans to create a luxury hotel and branded serviced apartments for sale.

Another newcomer is the Japanese Toyoko Inn chain, the construction of the hotel has been approved by the Moscow authorities and is planned in the Krasnoselsky district of Moscow.

Chains such as Mandarin Oriental and Corinthia Hotels have made repeated attempts to gain a foothold in various projects over the past 10-15 years, says Marina Smirnova, partner, head of hospitality and tourism at Cushman & Wakefield. According to her, Moscow is recognized as large global networks with the Luxury brands one of the “key cities in the world”.

Most of the announced projects include not only hotel rooms, but also apartments. Experts consider this to be a global trend. “Management of residences and apartments is one of the stages of market development, when traditional accommodation is already presented in various formats and price levels. It is logical that investors, operators, guests are looking for something new for themselves, ”says Tatyana Belova, Deputy Director, Head of the Hospitality Industry Division of the Strategic Consulting Department at CBRE.

Tatiana Weller, head of the hotel business department at JLL, adds that the German Meininger Hotels chain has come to St. Petersburg with a hybrid hotel with a hostel in Nikolskie Ryadi.

In total, according to Weller, at the moment there are 14 international operators operating in Russia, which together manage a portfolio of 40 brands in the country.

More Russian hotels

There are more chain hotels under the management of Russian operators in the country than hotels under international brands, by 1.5 times - 310 versus 201, according to a PwC study. But the number stocks of Russian and foreign operators are equal - 43,000 numbers for each group. Currently, facilities managed by network operators are located in 119 settlements Russia, of which Russian operators are represented in 104, international - in 42, according to a study by PwC in Russia.

Accor, Hilton, Hyatt, IHG, Marriott, Radisson have been working on Russian market, says Belova. The portfolio of each of these operators has a line of brands, some of which are not yet represented in Russia. Bulgari and AC by Marriott from Marriott International, HyattPlace from Hyatt Hotels Corporation, etc. may appear in the country in the coming years.

Operators are especially interested in Moscow and St. Petersburg, as well as Sochi. Belova mentions active interest from not only Mandarin Oriental, but also Jumeirah, Melia, etc. In St. Petersburg, according to the expert, you can find Belmond, Corinthia and Rocco Forte Hotels, in the regions - AccorHotels, Best Western, Domina Hotel Group , Hilton Hotels & Resorts, Hyatt Hotels Corporation, InterContinental Hotels Group, Kempinski, Lotte Hotels, Louvre Hotels Group, Marriott International, Radisson Hotel Group, Sokos Hotels, Wyndham Hotel Group. And many continue to expand.

Moscow and St. Petersburg are markets with a high share of business tourism and a high concentration of effective demand, explains the preferences of networks by the Deputy Director of the Strategic Consulting Department Colliers International Evgenia Tuchkova.

61% of the total volume of international hotels is in the portfolios of four players: Radisson Hotel Group (the largest operator by number of rooms in Russia, 9930), AccorHotels, Azimut Hotels, Marriott International. In Moscow, international hoteliers form a third of the market for high-quality hotel stock (excluding hostels, mini-hotels, departmental hotels), in St. Petersburg their share is estimated at 44%.

According to Anna Danchenok, head of the strategic consulting group in the real estate sector, PwC, 69% of the room stock of Russian operators is formed by hotels of three stars or less, 85% of the international fund is located in hotels of four stars or more.

Photo gallery

Hotels in Moscow

Regions - three stars

To enter the regional markets, according to Tuchkova, hotels of the "3-4 stars" level, the middle price segment, are more suitable. They are more efficient and sustainable in the face of economic instability.

According to Weller, out of 216 branded hotels in Russia, more than half (123) are located outside Moscow, the Moscow region and St. Petersburg. Among the openings in 2018 are hotels in Novorossiysk (Hilton Garden Inn) and Yelabuga (Ramada H&S in the Alabuga SEZ). Two hotels at once opened in Saransk - Mercure and Four Points by Sheraton. AccorHotels recently announced the opening of hotels in Blagoveshchensk and Yakutsk, Inter Continental Hotels Group - in Arkhyz, Tuchkova adds. In the plans of international operators for 2019, according to JLL, Voronezh, Perm, Kislovodsk, etc.

If all the announced projects are implemented by 2021, the room stock of international hotels will exceed the Russian one by 3-5%, predicts Oleg Malyshev, partner, head of the consulting services real estate companies PwC.

The most competitive will remain the middle price segment, spurred by the growth of domestic tourism (5-7% over the past three years). “Russian operators, mainly operating in the democratic segment, will have to accept the challenge of international brands in their field,” says PwC's research.

Out-of-town prospects

A poorly mastered niche, but interesting for foreigners, is the format of country hotels. As the head of the direction for the development of alternative territories of the investment company Key Capital Elizaveta Martynova notes, their average occupancy in the Moscow region is at the level of 55%. But interesting or relevant formats are filled by more than 80% on average over the year. This means that it is no longer possible to book rooms in such hotels 2-3 months in advance for the most popular dates for holidays. Among them Martynova names Imperial, individual objects of the Heliopark network, Mistral, a hotel in the village of Velich, Les Art Resort, individual small objects not under the management of large operators - an example is a number of objects in the Tver region. In winter, holiday homes next to ski resorts in the Dmitrovskoe direction are traditionally popular.

So far, the presence of foreign operators in the Moscow region is rather the exception than the rule. “Most of the country hotels are private small business, this is either a guest house or several cottages, but without a clear concept, pricing policy and a well-built promotion plan. As a result, suburban hotels (which still have great untapped potential) show miracles of loading on weekends, and are empty from Monday to Thursday, "says Viktoria Voronkova, general manager of Zenith PM apart-hotels.

However, according to Belova, projects with international brands are already working on the suburban hotel market, both under franchises and under direct management contracts. Among them are Radisson Blu in Zavidovo (Tver region), Hilton Garden Inn New Riga and Holiday Inn Vinogradovo (Moscow region), Azimut Pereslavl-Zalessky (Yaroslavl region). Several projects are at different stages of implementation.

According to experts, iconic objects have not appeared on the suburban market for a long time. However, Rixos Hotels announced plans to expand in the capital region, while the chain is represented by the only hotel in Krasnaya Polyana. According to the chairman of the board of Rixos Fettah Taminji, the network is located in active search and the stage of negotiations on the search for sites in the Moscow region, where it plans to build a 5-star country hotel with an all exclusive service system, which is now being tested in Abu Dhabi. “We are considering the possibility of building a resort hotel in the Moscow region, where Muscovites would come for the weekend or spend their holidays. Hotels inside Moscow are for visitors, but I am more interested in Muscovite clients, ”Taminji said.

According to Martynova, the emergence of attractive for the consumer complex formats of country hotels, a kind of "attraction" under the management of well-known international chains, can revive the market for country recreation, make weekend tourism more popular. “Outdated hotels that have lost their relevance will be renovated or sold to the management of IT-players, banks and other large corporate structures and then renovated to fit their needs, to strengthen their own social infrastructure, ”says the expert.

According to Voronkova, the arrival of international operators will add competition and make the segment "catch up" in terms of service standards, safety and attractiveness of facilities not only for recreation, but also for holding conferences, trainings and other corporate events.

What is pulling the net?

Russian hotel market despite currency fluctuations and political peculiarities, it remains one of the most attractive. The profitability of hotels for the ultimate beneficiary (investor) is still higher than in developed markets, says Weller. Mainly due to the fact that the cost work force, energy resources and utilities in Russia are lower, as well as taxes on land and property.

“The main problem of most modern hotel companies is the asset-light business model, when operators prefer to remain in the role of a manager without investing own funds in real estate. With considering limited quantity“Real” projects with all the characteristics necessary for a luxury brand (the classic formula of location, location & location is only one of the components, the ability of the developer to build a hotel of a given standard and bring the project to its opening is equally important), which the Moscow market can currently suggest, the competition between hoteliers is sometimes serious "

The company expects to make clients also those people who now live in independent hotels, recently built or opened in the restored Soviet room stock. “We go to these guests by two routes: we develop new hotels of medium price category- more traditional Courtyard by Marriott and Four Points by Sheraton, as well as lifestyle brands Moxy, Aloft and AC by Marriott - and we are considering the possibility of rebranding existing hotels, ”says Kiseev.

Alexis Delaroff, Regional Director of Accor-Hotels Vostok, agrees that there are not enough high-quality accommodation facilities in Russia: “For example, in Paris, a city several times smaller than Moscow, we have more than 150 hotels of various price categories - all of Russia. There are opportunities for growth and development both in the economy segment and in the segment of resorts and five-star hotels. " In his opinion, interest in Russia from foreigners is growing - partly thanks to the 2018 FIFA World Cup: "There is great nature, delicious food, distinctive culture and a lot of attractions, and all this is quite affordable due to the low exchange rate of the ruble." In addition, Russia has a very large domestic market and there is an interest in travel. All this, subject to the development of infrastructure within the country, creates a favorable picture for the development of the hotel segment, Delaroff said. “Finally, AccorHotels's motivation is to stay ahead. The more hotels you have, the better you feel and understand the market and the more opportunities arise to control it, ”he adds.

The domestic hospitality market is going through hard times. The development problems voiced by industry analysts are considered to be a weak involvement of professionals in the field and a tangible run with the tourism industry. The main catalyst for supporting the hotel business in Russia is the placement of rooms in high-traffic areas. There is no need to go far to confirm such data. According to official data, almost 70 percent of the industry is taken over by hotels in two federal cities - Moscow and St. Petersburg.

Problems and catalysts for the development of the Russian hotel business in infographics:

General trends

According to official data, Russia is overall performance per capita room availability continues to lag behind European partners. At the same time, most entrepreneurs complain about the low level of customer demand. The result of low consumption is a sharp reduction in the cost of hotel maintenance and, as a consequence, a deterioration in the quality of service.

According to experts' forecasts, the ratio of the hotel market turnover in the coming years will noticeably change towards regional consumption. The interest on the part of investors is due to the attractiveness of large industrial cities, which are able to host significant conferences, stages of events of a global scale. According to the analysis of the hotel market carried out rating agencies, the regional hotel business has significant potential to attract business activity in a highly competitive environment.

Key analysis parameters

Most of the research carried out in relation to the Russian hospitality business is based on the indicators of Moscow and St. Petersburg. Analysis of the Moscow hostel market allows you to form real key indicators that can be used as a basis for decision-making among developers and potential investors. To help the service sector in 2010, the program “Development of domestic and inbound tourism in Russian Federation(2011 - 2018). Already today it is possible to assess the actual results of the implementation of the seven-year plan:


As can be seen from the analysis of the hostel market, at the beginning of the launch of the targeted development program, the potential of the hotel business to accommodate the internal flow of tourists was 70 percent of the maximum possible level. It is noteworthy that the market share of cities of federal significance is at the same level. In their assumptions, the experts note that the greatest success has been achieved precisely in the development of the hotel business at the regional level.

Similar growth rates have been achieved in increasing the capacity to receive foreigners. And this is how we managed to achieve an increase in the quadrature of the number of rooms. The diagram clearly shows that the active growth in construction occurred in 2016-2018, in the period ahead of the World Cup.


The most active rate of growth in the area of ​​the number of rooms occurred before the World Cup, which once again confirms the industry's dependence on significant events. According to surveys of tenants, the cost of living in apartments located in the area where the host stadiums are located increased tenfold in the summer. There have been cases when permanent tenants were sharply denied accommodation in favor of fan tourists.

As far as Moscow and St. Petersburg are concerned, the development of facilities for accommodating a tourist flow is somewhat limited in housing stock and objects of cultural significance. In the regions, the situation is somewhat different, since the potential for the construction of a new room stock by developers remains.

Loading the room stock

When analyzing the hotel market, one of such indicators of the level of demand for hotel services as occupancy should be taken into account. The industry average is no more than 49 percent. With the introduction of the targeted development program by 2018, it was possible to increase this indicator by no more than 5 percent. It should be noted that the hotel business in Russia, according to statistics, is developing much better in the regions. Everything is explained again by the activity of the mayors, who today focus on the development of tourism. With the influx of new visitors to the regions, the need for room stock also increases.

Despite the fact that there is a shortage of middle class rooms in the industry as a whole, developers continue to build hotels of classes 4-5. Following the trend is due to the fact that the average payback period for a room stock, especially a new one, is at least 10 years. There is a direct relationship here - the higher the class of the hotel, the faster investments will begin to return to the capitalists.

* Particular attention among industry representatives is focused on the seasonality of the business. St. Petersburg remains especially sensitive in this regard, and the more southern regions benefit most of all, where the tourist flow can persist for at least 5 months.

Attracting capital to the industry

If the demand in the industry from the consumer is generally understandable - there is a sensitivity in cost and quality, then investors are even more capricious. In focusing on the development of the hotel business, capitalists are guided by the industry's profitability indicators. According to research and statistics of the hotel market, the profitability of this service sector can reach the level of the niche of rented real estate for the needs of corporate parties (placement of offices, warehouses).

For example, profitability in Moscow, regions and Europe:


The results of the study of profitability clearly show the attractiveness of hotel real estate for placing not only residents, but also serious investments. This is not surprising, since Moscow is considered one of the most expensive cities in Europe.

Among the latest trends that give a real impetus to the maintenance and development of the industry is the construction of complexes of wide functionality. Among the areas that such centers will cover is the creation of accommodation facilities for vacationers.

According to the #MARKETBEAT report from Cushman & Wakefield, 2019 for the Moscow hotel market could become a year of sobering up and price wars between hotels. The effect of the increase in hotel revenues, caused by the growth in demand in the wake of the 2018 FIFA World Cup, is completely exhausted: the demand has returned to its usual volumes and is sensitive to price fluctuations.

The past 2018 was strongly influenced by the 2018 FIFA World Cup: the record demand for hotels in Moscow at the beginning of summer had a positive effect on the level of hotel profitability, while hoteliers mainly concentrated on reaching the maximum level of tariffs, while the average monthly level of occupancy in the market as a whole in June-July it did not reach 90%.

If we talk about the results of the year, then the average market occupancy rate for hotels modern quality in 2018 reached 76.6%, by 4 p.p. higher than a year earlier. Hotels in the Midscale and Upscale segments became the leaders in terms of overnight stays sold: they recorded an average annual occupancy of 80.4%. The minimum increase in load was noted only in the high segment, where the change was only 1 pp. On the other hand, placement prices increased in all segments, without exception, by an average of 38.4% (from 6,428 rubles in 2017 to 8,898 rubles over the same period in 2018). Hotels in the Luxury segment managed to make the most of their guests during the 2018 World Cup (+ 55.0% to RUB 21,645).

As a result, hotels in all price segments, without exception, showed excellent indicators of growth in the rate of return per room (Revenue per Available Room - RevPAR). According to Cushman & Wakefield, the average annual change in yield per number for the market as a whole was 46.1% in rubles and 36% in US dollars.

However, by the end of the year, the "effect of the 2018 World Cup" was practically exhausted, according to Marina Usenko, partner of the department of hospitality and tourism at Cushman & Wakefield.

“Based on a retrospective analysis of the activity of hotel markets in other cities and countries that hosted the World Cup and similar mega-sporting events, market participants hoped that the“ effect of opening a new tourist destination ”would work, as happened, for example, in Barcelona after the 1992 Summer Olympics. , where in less than a decade the annual number of visitors doubled - from 3 million in the early 90s to 7 million in 2010.However, one of the most important mechanisms for such radical changes in the Moscow hotel market, discussed by the Russian Government immediately after the end of the World Cup, is 2018 visa regime reforms, which, according to experts, can increase the number of visitors for the traditional "tourist capitals" of the country - Moscow and St. Petersburg - by 10-20% per year, has not yet received further development. It remains to be hoped that we will still see the result, albeit with some delay, ”noted Marina Usenko.

According to the expert, 2019 has every chance of becoming a year of general sobering up and even "price wars" between Moscow hotels. “Therefore, the situation will be difficult for the participants. So far, we see that there are no prerequisites for the growth of operating revenues of Moscow hotels above the level of projected inflation, ”Marina Usenko believes.

The supply of modern quality has grown sharply over 2017-2018 - about 2,500 "keys", and the market has yet to "digest" this volume. The market for high-quality supply in Moscow over the past year has grown by 4%, and in 2017 - by almost 9.5%. In 2019, it is planned to commission a total of 715 hotel rooms in 4 hotel projects: Holiday Inn Express Baumanskaya, Crowne Plaza Park Huaming, Mercure Neglinnaya and Hampton by Hilton Rogozhsky Val. Thus, the net expected increase in supply is modern standard in Moscow in 2019 is estimated at only 3.6%.

The next "jump" in the increase in supply should be expected no earlier than 2021, the expert is convinced. “The lack of radical changes in the economy is forcing hotel investors to shift the planned start dates of the construction of the announced projects to a later and later date, resulting in the expected average growth rate of supply between 2019-2024. will amount to only 5.6% per year, ”concludes Marina Usenko.

"Price wars" will be due to the fact that the increase in supply, alas, is not accompanied by a commensurate increase in demand. In addition, demand will continue to exhibit high price sensitivity. The reason for this is low growth rates of the national economy, a permanent situation with economic and political sanctions, an increase in the tax burden (including an increase in VAT from 18% to 20%) and a periodic weakening of the ruble.

Cushman & Wakefield Hospitality & Tourism estimates the second half of 2016 will bring hotels back into the revenue growth zone.

Sentence

High-quality offer of hotels in Moscow in the II quarter. 2016 will remain at the level of 16 thousand numbers. ( Excluding hostels, mini-hotels, as well as near-airport hotels).

The closure at the beginning of 2016 of two large hotels (Iris Congress and Belgrade) for reconstruction at once brought 431 rooms out of the market. Considering that the former Iris Congress reopened in June - as Holiday Inn Seligerskaya (although the number of rooms fully meeting the brand standards is still limited to 30) - the actual change in the quality hotel supply in the first half of the year was -1.4% compared to with results at the end of 2015

The room stock, which is realistically expected to open before the end of 2016 after the opening of the renovated Holiday Inn Seligerskaya, is estimated at 750 units (see the table with the announced projects), although the “net” increase in the quality room stock is much more modest - 470 units.

Provided the builders comply with the schedules for the completion of new projects, based on the results of 2016, high-quality hotel supply may increase by 2.9%, to approximately 16.8 thousand rooms of various categories.

New offer 2016

Midscale & Economy - mid-price and economy segment

Upscale - Above Average Price Segment

Upper-Upscale - high price segment

Luxury - luxury segment

The main increase in numbers - in the Economy segment

The growth in the supply of economy-standard rooms in 2016 will be 25 percent.

With the real growth of quality supply by only 470 rooms, which is 3.4 pp. lower than the rather modest growth results of the previous period, the main growth in 2016 occurs in the Economy segment, which in mid-2016 constituted 9% of the market (1.488 rooms). By the end of the year, taking into account the opening of Ibis Kievskaya (350 rooms), its share in the market structure will grow to only 10%, but the increase in the number of rooms will be as much as 25%.

Despite the planned opening of Novotel Kievskaya (250 rooms) and Adagio Kievskaya (150 rooms), the share of the Midscale segment will remain practically unchanged due to the fact that due to the temporary closure of 270 rooms in the former Belgrade hotel, the net increase in the supply of this category will be only 2 % of the room stock.

In the absence of new finished projects standards Luxury, Upper-Upscale and Upscale, their proportional shares in the market structure, if they are reduced, then insignificantly.

The structure of the hotel offer, II quarter 2016 Nov.

Demand

The recovery of the average room price is becoming a trend

The timid sprouts of optimism noted in the 1st quarter. year in the luxury price segment, by the middle of the year spread to more democratic hotels, which resulted in the market average growth of the ADR indicator by 8.6% compared to the same period in 2015 - up to 6.628 rubles / room.

At the same time, the main drivers of growth are the hotels of the Luxury segment, where prices increased by an average of 13.5%, to 14,016 rubles per room.

In the Upper-Upscale and Upscale segments, ADR growth was more modest - by 5.9% and 3.6%, respectively. In the Midscale category, there has been no growth at all (less than 1%), while in Economy hotels there has been a further decrease in prices - on average, by 6%.

Is there a recovery in demand?

The recovery in demand for hotel services, which has been observed in Moscow hotels with practically no change in the growth vector over the past 12 months, with an obvious acceleration of the pace, starting from the beginning of the IIQ. year, allowed the market, based on the results of the first half of the year, to increase the level of utilization by an average of 3.4 pp. (5.5%) compared to the previous period.

Not all price segments have benefited equally from the increased number of overnight stays sold. The largest growth (7.2 pp and 5.9 pp) was recorded in hotels of the Upscale and Midscale categories, respectively. Economy-standard hotels, on the other hand, are temporarily losers - with a 1.7 percentage point loss in occupancy.

In percentage terms, however, demand growth is most pronounced in the Upscale and Luxury segments - 11.9% and 9.9%, respectively.

The rise in hotel profitability gives hoteliers a reason for optimism

The recovery in demand, seen by Moscow hotels in virtually all price categories since spring, has enabled them to convert the unidirectional growth in overnight stays and cost of accommodation into an increase in profitability per room.

According to the results of the first half of 2016, the average level of profitability per available number was RUB 4.319, which is almost 15% higher than the result of the same period in 2015.

The most impressive results were demonstrated by hotels of the Luxury standard (24.7%), as well as Upscale (15.9%). increase the load.

The Economy segment, in which the share of the old "post-Soviet" room stock is still significant, continues to show negative results (-8.4% compared to the previous period), which is most likely caused by an attempt by hotels in this price category to stop the outflow of customers by reducing prices for accommodation.

Trends

High hopes for 2016 results

A confident recovery in demand, marked by Moscow hotels from the end of the 1st quarter. 2016, allows Moscow hoteliers not only to actively increase flexible rates (including rates in online sales systems, which today provide an impressive share of rooms sold), but also gives rise to optimism regarding the results of the year, since the second half of the year is traditionally more productive in terms of hotel revenues.

As a result, with some possible increase in loading on the market as a whole, the main driver of growth is expected to be the ADR indicator (8-10% in annual terms), which will overtake the average annual inflation rate predicted by the Central Bank of the Russian Federation (5-5.5%) and will return hotels to the revenue growth zone.

The main question is whether these positive results and the high rate of tariff recovery can be converted into revenue growth that exceeds the rate of inflation in 2017.

 

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