Moscow
ADR fell
RussiA
occupAncy fell
RussiA
RevpAR fell
global update hoping to get a performance boost from the 2014 Winter Olympics . Many hotel companies have reported disappointing figures for properties outside the Sochi area , however . “ During the Olympics the majority of guests came directly to Sochi , and the expected uplift of business in Moscow was not even noticeable ,” says Tom Flanagan , area vice president for Eastern Europe , The Rezidor Hotel Group . “ In fact , many businesses reduced normal activities and events due to the Olympics .”
Cancellations from Western business travelers in response to the Ukraine conflict and a decrease in visitors from Ukraine , Russia ’ s primary inbound market , are also taking their toll on hotel performance , although business from other feeder markets like China and Turkey has remained steady . Luxury
Although it now operates as the Radisson Royal Hotel Moscow , the former Hotel Ukraina is a 5-star luxury property , showcasing the lack of midscale supply in Moscow and the rest of
Russia . properties are seeing the largest performance dips , and according to STR Global , Moscow reported the largest ADR decrease in Europe in March , falling 17.4 % year-on-year to € 124.85 ( US $ 172.44 ). Meanwhile , Russia as a whole saw occupancy decline 8.3 % to 50.8 % and RevPAR drop 3.6 % year-on-year to 2,615.87 rubles ( US $ 73.38 ).
“ We have noticed a significant drop in leisure group bookings for the summer period and large seminars , especially those involving foreign attendees due to the event either being postponed or not enough attendees registering ,” says Bastien Blanc , the Moscow-based vice president of sales , marketing and business development for Russia and CIS at Interstate Europe Hotels & Resorts .
When the dust settles Once the conflict with Ukraine is resolved , both the global brands and local hotel developers plan to continue expansion in Russia given its lack of supply , particularly in the midscale segment . Developer VIYM , London , plans to open three hotels in regional Russian cities this year under the Holiday Inn Express and Park Inn by Radisson brands , to be operated by RIMC International Hotel Resort Management and Consulting , Hamburg , Germany .
“ Secondary cities have huge potential in the midmarket segment , as do the principal cities of Moscow and St . Petersburg ,” Flanagan says . “ There are very few properties east of the Ural Mountains , and this area will grow hugely over the next 10 years .”
While Sochi is viewed as being oversupplied , Russia ’ s newly added territory in Crimea could also see new hotel development when hostilities cease , as it is a traditional tourist spot for Russians , and the depreciating ruble is encouraging Russians to travel domestically .
ThRough
MARch
2014
❯❯ ❯❯ ❯❯
Moscow
ADR fell
17.4 %
RussiA
occupAncy fell
8.3 %
RussiA
RevpAR fell
3.6 %
Source : STR Global
www . hotelsmag . com June 2014 HOTELS 11