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News Release

Moscow

Ufa Hotel Market Overview


Moscow, 1 December 2014 - JLL Hotels & Hospitality Group is glad to present the Ufa Hotel Intelligence report.

Ufa is the capital of the Republic of Bashkortostan and with just over 1 million inhabitants it is a significant industrial, transport, scientific and cultural centre.

“There has been a strong desire from the major brands to open in the city and despite 10 years of ‘projects’ there are still no major branded properties in the city. It is perceived that the city has been ‘hard to do business with’ but starting from 2015 there will be a sudden influx of branded properties at all segments. This should boost the city in terms of image and accessibility but will create strong price competition. Ufa, perhaps surprisingly, is not a host city for 2018 World Cup – this may work in its favour by not generating additional development buzz for new hotels.” – David Jenkins, Head of JLL Hotels & Hospitality Group, said.

There are officially 55 hotels in the city with 2,000 rooms (over half the rooms are ‘mini-hotels’). There is currently just the one recognizable brand operating today in Ufa, the recently refurbished 204 key Azimut. Local chain AMAKS also operate in Ufa. Other main hotels are the Bashkortostan and President Hotels.

There is no tourism in the city to speak of. A new terminal is being built at Ufa airport and is planned for delivery in late 2014. “The bulk of demand is corporate domestic (85%) and sensitive to rate. Many travelers prefer smaller private hotels over the larger (more expensive) or lower quality options.” – David Jenkins noted. – “With a scarcity of choice guests are driven towards mini-hotels and apartments.”

According to David Jenkins, with still no major brand operating in Ufa, the existing hotels have been able to capitalize and demand higher rates than many other regional cities (RUB 2,800-3,300) though occupancy still remains below 60% in most cases.

“It has been extremely difficult for the major brands to secure and deliver projects in Ufa. Of course it means that several projects from most of the main brands will be opened with one or two years and generate an entirely new landscape to Ufa’s hotel market. It’s the ‘waiting for a bus and they all arrive at once’ syndrome. It remains fundamentally an economy based around oil and we now wait to see the impact of the Bashneft takeover on the local economy and hotel market.” – David Jenkins commented.

Please find link to the report