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Occupancy rates in Sochi edging up

Eurobuild CEE 01 February 2018

RUSSIA Occupancy in mountain hotels increased for the third year in a row, this time by 5 ppt over 2016, and climbed up to 59 pct.

“2017 has been the first year in Krasnaya Polyana when not a single hotel closed for the ‘off-season’. Hoteliers in the Sochi mountain cluster, utilising the cold summer effect and quoting lower prices, have managed to redirect and capture some of the tourist traffic that habitually goes to the sea. We believe this was additionally aided by an increased range of entertainment options, such as a casino in Gorky Gorod which has been operating profitably for a whole year, as well as a busy event calendar,” said Tatiana Veller, the head of the hotels and hospitality group at JLL.

Sochi seaside hotels saw only a slight increase in occupancy (less than 1 ppt), to 48 pct, while also seeing a 1 pct drop in ADR to RUB 9,652 (app. EUR 138). “Hence, RevPAR increased by only RUB 8, to RUB 4,639. This low growth could continue this year, should the charter flights to Egyptian resorts resume in 2018. The only month to be affected by the FIFA 2018 World Cup will be June, when Sochi will host five matches at the Fisht Stadium in the Imereti Lowlands. This should certainly result in an improvement in operational performances,” said Tatiana Veller.

According to Tatiana Veller, the two good months for quality hotels by the sea in 2017 were June with the Confederations Cup and October, which saw a variety of large-scale sports and entertainment events in. “In June, this resulted in double-digit ADR growth (by 11 pct to RUB 10,887), while October showed a 17 ppt Occupancy increase, to 62 pct, coupled with a rise in ADR of RUB 400, which resulted in an incredible 45 pct improvement in RevPAR compared to last year,” she says.

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