The segments from upscale downwards are not having such a good year, with both upscale and midscale segments down 10% in RevPAR so far in 2015.
The city hotel market is running at 4.5% down in RevPAR for the first 6 months of 2015 compared to the half-year in 2014. This is coming from a drop in occupancy with ADR essentially flat. This figure was at 6% down after Q1 so the market is recovering as the year progresses.
“There is a clear split between the upper and lower segments in performance, with the luxury hotels seeing growth in rate (up 10% to RUB 15,200) and a slight growth in occupancy (60%) and the upper upscale hotels benefitting from a boost in occupancy (up by 6% year to date) as foreign clients ‘upgrade’ themselves” David Jenkins, Head of JLL Hotels & Hospitality Group, Russia & CIS, commented.
The segments from upscale downwards are not having such a good year, with both upscale and midscale segments down 10% in RevPAR so far in 2015. This has come mostly via a drop in ADR – as hotels are needing to reach out to groups to fill rooms left vacant by exiting corporate guests. Such groups from Asia may well provide occupancy but rates are far lower than previous corporate guests who have limited their travel to Russia for now. This drop in ADR in rubles is an even more significant drop in hard currency terms and poses the concern as to when these segments will be able to grow rate to counter the growing operating costs.
“We see the trends continuing into the second half of the year, and on the assumption that there will be no further political obstacles then the year should close almost flat to 2014 for the city as a whole with both luxury and upper upscale segments closing the year in strong positions to drive rate further in 2016 – which in turn should spin-off and assist the upscale segment to make some inroads into rate growth in 2016”, David Jenkins noted.
Photo caption: Kempinski – Moscow Hotel Baltschug.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
