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Strong results for Moscow hotels

01 August 2017

RUSSIA Over the first six months of the year 70 pct of the quality hotel rooms in Moscow were occupied according to data from JLL.

Over the period supply grew by 1,200 rooms while ADR decreased by 0.5 pct. “The pricing can be explained by several main reasons: increasing competition, a very specific type of demand type (sports fans, and tourist groups) and supply growth concentrated in the cheaper market segments, thus putting pressure on the ADR. As a result, RevPAR showed only a slight rise (1.4 pct), but it still exceeds the figure for the last 5 years – RUB 5,100,” says Tatiana Veller the head of JLL Hotels & Hospitality Group for Russia & CIS.

In June, all segments of the quality hotel market in Moscow saw ADR growth, while the majority of them also displayed record-breaking occupancy. This was partly due to the FIFA Confederations Cup. Most of the foreign demand gravitated to the more expensive hotels, while domestic and more price-sensitive demand went to more budget-friendly accommodation options. “In general, the H1 2017 results can be divided into two groups: in the first one, RevPAR increased due to occupancy growth with a stable ADR, while in the second group minor losses in RevPAR occurred due to the lack of demand, which encouraged hoteliers to attempt to at least protect the ADR.” – says Tatiana Veller. “The first tendency could be seen in the Upscale and Midscale segments with 6 pct and 7.5 pct RevPAR growth, to RUB 4,700 and RUB 2,800 respectively with occupancy rising by 5.4 and 3.4 ppt. At the same time, the Upper Upscale and Upper Midscale segments declined in RevPAR by 0.4 pct and 0.2 pct with minimal fluctuations in occupancy and ADR compared to 2016,” she added. In the luxury segment, occupancy for H1 dropped by 1,6 ppt, and ADR by 1.2 pct, bringing RevPAR down by 3.7 pct - to RUB 11,000.

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