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News Release

St. Petersburg

St. Petersburg Hotel Market Update. Q1-Q3 2013 Results


St. Petersburg, 18 October 2013 — Jones Lang LaSalle’ Hotels & Hospitality Group announces the summer and Q1-Q3 2013 St. Petersburg hotel market results.

David Jenkins, Head of Jones Lang LaSalle’ Hotels & Hospitality Group, Russia & CIS, said: “Traditionally the period from June to August is the peak season in St. Petersburg. It is still very much a hotel market driven by leisure and with a strong peak in June in terms of achievable rates. The summer season this year was particularly good, with hotels in all segments increasing RevPAR from 12% to 22% over the same time period in 2012.”

The increases per segment were:
• Luxury + 22% (11% in occupancy and 11% in rate);
• Upper Upscale +18% (12% in occupancy and 6% in rate);
• Upscale +12% (6% in occupancy and 6% in rate);
• Upper Midscale +15% (4% in occupancy an 11% in rate);
• Midscale +22% (2% in occupancy and 20% in rate).
 
“There has clearly been a return to form for the city and the increases in average rate are encouraging. In terms of how this reflects in the year to date numbers we can see a very similar trend for the year – with growth both in occupancy and rate,” - David Jenkins commented. - “In terms of those considering hotel developments in the city, it is of interest to compare the achievable RevPAR for each segment in St. Petersburg with the same segments in Moscow. There is a significant difference in performance – with the RevPAR in Moscow coming in more than 40% higher than in St. Petersburg for the same segments. Given that hotel development costs are similar in each city it is clear that investment returns are far greater in the capital.”

Q1-Q3 St. Petersburg Hotel Market results by segment
 
Luxury
An increase in occupancy of 5% added to a rate growth of 7% brings a year to date RevPAR increase of 13% in the luxury segment – gaining much from an excellent summer season. “In comparison to Moscow the ADR is 12% lower in St Petersburg – the closest of any segment and a reflection of the quality of luxury product available. There is though a 25% difference in occupancy – showing the differences in market conditions and reflecting the strong seasonality in St. Petersburg,” – David Jenkins said. – “Four Seasons only just opened after the summer so is not yet going to have any impact - this will be for 2014 and we expect it to boost ADR further.
 
St. Petersburg Luxury Segment Q1-Q3 2013 (year on year)
St. Petersburg Luxury Segment Q1-Q3 2013_18102013.png
Source: STR Global, Jones Lang LaSalle
 
 
Upper Upscale
This segment has so far seen a 5% growth in occupancy and the same 5% growth in ADR. The occupancy in the upper upscale segment sits just 10% below that of Moscow year to date but rate is over 25% below.
 
St. Petersburg Upper Upscale Segment Q1-Q3 2013 (year on year)
St. Petersburg Upper Upscale Segment Q1-Q3 2013_18102013.png
Source: STR Global, Jones Lang LaSalle
 
 
Upscale
The upscale segment sits 25% below the similar segment in Moscow – a reflection of the corporate rate structure in the city. It has seen a 5% growth in occupancy and 7% in rate so far this year.
 
St. Petersburg Upscale Segment Q1-Q3 2013 (year on year)
St. Petersburg Upscale Segment Q1-Q3 2013_18102013.png
Source: STR Global, Jones Lang LaSalle
 
 
Upper Midscale
A strong 18% increase in RevPAR shows again where the market really sits in terms of rate. The year to date occupancy of 68% is the highest in the city and represents a growth of 10% over last year.
 
St. Petersburg Upper Midscale Segment Q1-Q3 2013 (year on year)
St. Petersburg Upper Midscale Segment Q1-Q3 2013_18102013.png
Source: STR Global, Jones Lang LaSalle
 
 
Midscale
This segment seems to have reached peak occupancy at close to 68% - posting only a 2.5% increase over last year. The market itself is unable today to grow much above this level. The growth can come in rate only, and we see an impressive rise this year so far of 12%.
 
St. Petersburg Midscale Segment Q1-Q3 2013 (year on year)
St. Petersburg Midscale Segment Q1-Q3 2013_18102013.png
Source: STR Global, Jones Lang LaSalle
 
 
David Jenkins concluded: “Occupancies in the lower segments seem to be hitting a peak and with new hotels coming annually – we expect 800 new rooms to open in 2014 – we see occupancies remaining stable but rates will see some challenges in the next two years so the growth this year is good for the market going forward.”
 
 
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square meters and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $47.7 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg and Kiev. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. For further information, please visit www.jll.ru
 
 
About Hotels & Hospitality Group
Jones Lang LaSalle’s Hotels & Hospitality Group serves as the hospitality industry’s global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centres; mixed-use developments and other hospitality properties. The firm’s more than 265 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totalling nearly US$25 billion, while also completing approximately 4,000 advisory, valuation and asset management assignments. The group’s hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.
For more news, videos and research from Jones Lang LaSalle’s Hotels & Hospitality Group, please visit: www.jll.com/hospitality or download the Hotels & Hospitality Group’s app from the App Store