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News Release


Moscow Hotel Market Update. H1 2014 Results

​Moscow, 06 August, 2014 – JLL’s Hotels & Hospitality Group announces the H1 2014 Moscow hotel market results.

“The results for the first half of the year is a mixed bag for Moscow hotel market – though encouragingly the impact of the Ukrainian crisis is not being felt too much – with results down, but less than feared.” - David Jenkins, Head of JLL’ Hotels & Hospitality Group, Russia & CIS, said. – “The city overall has dropped 5.4% in RevPAR if compared to the same 6 months period in 2013 – unsurprisingly coming mostly through a drop in occupancy. It is though not as bad as we were expecting following the political challenges around the Ukraine crisis. The only segment not to see an overall drop has been the upper midscale segment (2% increase in RevPAR), which seems to have benefitted from a swing from the upscale segment (11% drop in RevPAR). Given that ruble inflation is moving beyond 6% year to date, the overall drops in actual ADR show that hotels are unable to increase prices with in line with inflation.”

Moscow Hotel Market in details


A 2.5% drop in RevPAR follows on from a similar growth this time last year. “Changes in performance in this segment are minor – indicating a degree of stability in the segment – but no real growth. There has been no new entrant to this segment since the Lotte in 2010, another reason behind the stability of performance. We do though expect to see fluctuations in results once the Four Seasons opens. With no real drivers to boost weekend demand in the city and an occupancy that has been more or less exactly the same since 2011 – the luxury segment is about to get much more competitive. We also wait to see the results of the negotiations of a new operator for the former Kempinski Nikolskaya.” – David Jenkins commented.

Moscow Luxury Segment H1 2014 (year on year)


Source: STR Global, JLL

Upper Upscale

“With ADR more or less the same as 2009, with tiny changes each year, this is also a segment that is unable to find the right demand that can push rates higher. An almost 6% drop year to date in occupancy with a 4% increase in ADR leaves the segment 2% down in RevPAR year to date. ADR in this segment has been close to RUB 10,000 at this stage in the year every year since 2009, yet annual inflation has been above 7%.” – David Jenkins noted.

Moscow Upper Upscale Segment H1 2014 (year on year)

Moscow_Upper_Upscale_Segmen_ H1_2014_year-on-year_06082014.png

Source: STR Global, JLL


Following on from positive annual occupancy growth since 2010, we have seen a concerning start to the year for this segment – down 8% occupancy and 3% ADR. Prices have remained stable since 2010 whilst hotels have been growing occupancy. With the new Marriott on the Arbat coming soon we will start to see increased competition amongst the upscale hotels in what is clearly a difficult time.

Moscow Upscale Segment H1 2014 (year on year)


Source: STR Global, JLL

Upper Midscale

“With an occupancy that has been almost flat at close to 70% since 2006, and an ADR that has been flat since 2010 this remains a highly predictable segment and a target for investors.” – David Jenkins commented. – “A 7% growth in occupancy this year seems to be taken from the upscale segment. ADR is around RUB 4,000 year to date.”

Moscow Upper Midscale Segment H1 2014 (year on year)


Source: STR Global, JLL


A 14% jump in rate in 2011 was followed in 2012 by an 11% boost in occupancy. 2013 saw more or less stable, flat results and that trend looks to be continuing this year, despite the addition of the new Ibis on Bakhrushina to the segment.

Moscow Midscale Segment H1 2014 (year on year)


Source: STR Global, JLL

“We have not seen any new hotels of note opening this year so far, and still expect to see Four Seasons, Marriott New Arbat and Radisson Sheremetyevo before the end of the year. We have though seen changes in management of two hotels this year – with the former Renaissance Olympic rebranding as Azimut and the Nikolskaya Hotel de-flagging from Kempinski with rumors circulating at time of printing of potential new operators. This should become clear in Q3.” – David Jenkins said. – “The continuation and extension of sanctions can clearly have a negative impact on hotel performance and it is hard even now in the mid-point of the year to predict how the second half will go. We are all in new territory with no historical benchmarks to draw from.”

About JLL

JLL (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 fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 , 2013 and 2014 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.

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