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News Release

Moscow

Novosibirsk Hotel Market Overview


Moscow, 24 October 2014 - JLL Hotels & Hospitality Group is glad to present the Novosibirsk Hotel Intelligence report.

Novosibirsk is the geographical centre of Siberia and the largest industrial, cultural, scientific and administrative city in the Siberian Federal District. It is the 3rd largest city in Russia with a population of over 1.5 million. Novosibirsk is a huge multimodal transportation air and railway hub. The city is a cross-over point for the West-Siberian railway, Chelyabinsk-Irkutsk (Baikal) and Novosibirsk-Tashanta (Chuisky Trakt) federal highways; international, federal and regional air routes and the navigable river Ob.

“The major city hotels are mostly located on the right bank (central) part of the city where most of administrative buildings, major corporate offices and city ‘attractions’ are located. There are officially 40 hotels in the city with 2,500 rooms.” – David Jenkins, Head of JLL Hotels & Hospitality Group, said. – “The hotel market is actually presented by five major hotels (1,368 rooms); Marriott (175 rooms), Doubletree by Hilton (188 rooms), Azimut Hotel Sibir (259 rooms), congress hotel Novosibirsk (430 rooms) and River Park Ob (316 rooms).”

The city is a major stop-off on the Trans-Siberian railway but does not in itself attract much in the way of tourism. There were 245,000 registered hotel guests in the city in 2013, a 75% growth since 2008. The bulk of demand is corporate domestic (85%) and sensitive to rate. Average duration of stay is 2-3 nights due to the distance from, and 3-hour difference with Moscow.

“The Doubletree by Hilton had found its market by 2013 as the key business hotel in the city for the local administration and corporate visitors. The opening this year of the Marriott has thrown a competitive gauntlet into the market.” – David Jenkins commented. – “It is yet too soon to see the impact but one can suppose that there is insufficient demand at that level for both hotels. The Azimut remains a popular business hotel and local chain Marins Group continue to dominate the economy segment. With strong new supply coming expect to see intensified rate competition.”

“With both a Marriott and Doubletree in the city it remains to be seen how occupancy and rate will be impacted with the Marriott having just recently opened. Hotels within the midscale segment report occupancies in the range of 55% to 60% annually. With no leisure or weekend business this seems to be the peak.” – David Jenkins noted. – “The Doubletree by Hilton had found its market by 2013 as the key business hotel in the city for the local administration and corporate visitors. The opening this year of the Marriott has thrown a competitive gauntlet into the market. It is yet too soon to see the impact but one can suppose that there is insufficient demand at that level for both hotels. The Azimut remains a popular business hotel and local chain Marins Group continue to dominate the economy segment. With strong new supply coming (includes Domina, Park Inn, Ibis in 2015) expect to see intensified rate competition.”

Please find link to the report