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News Release

​St. Petersburg

St. Petersburg Hotel Market Update. Q3 2015 Results


​St. Petersburg, 26 October, 2015 – JLL Hotels & Hospitality Group announces the Q3 2015 St. Petersburg hotel market results*.

St. Petersburg has been named a top European travel destination by the World Travel Awards for a reason. This year to date the city, having hosted several large international events during the first part of the year, riding the tail of the currency wave, with the help of the boost to local tourism delivered by changing geopolitical climate and economic environment, and increased attention of international travelers from high volume markets, combined with the warm (and late) Fall, is seeing unprecedented results across all segments.

“Occupancy market-wide YTD rose by 20% compared to last year, resulting in 7 out of 10 rooms being sold every night of the year so far. All segments except luxury attracted the unseen number of guests, registering occupancies of over 80% (and in some cases over 90% - in the Upscale segment). Boosted by an 8% ADR gain in the same period (albeit mainly driven by the Luxury segment), across segments hotels were able to register a very solid increase in RevPAR of 28%, or RUB 900”. - Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, said.

The only slight (1%) drop in ADR was registered in midscale hotels; otherwise all segments by the end of third quarter showed positive results for all indexes. Noteworthy is the fact that in every one of the top3 segments (Luxury, Upper Upscale and Upscale) Occupancy rose by more than 20%, which drove RevPAR growth of over 24% in YTD numbers (reaching a whopping 47% in Luxury). 

“The additional demand that the city attracted this year seem to have been on the more upscale side. The lower the segment, the lesser share of the additional traffic hotels have been able to capture.” – Tatiana Veller noted. – St. Petersburg has set a high standard of financial performance in the first 9 months of 2015. The key will now be to manage expectations along with expenses and not rest on laurels. Hard work begins when the snow falls. Being a highly seasonal destination, mainly driven by leisure tourism during the warm months, the city will need to do some work to capitalize on the volumes it saw this year, making sure some of those tourists come back, and that business demand also catches up. No new supply is expected to come on the market in the immediate future, so the existing properties should have time to digest the newly captured volumes.”

​St. Petersburg Hotel Market in details

Luxury

Benefitting from robust increases in both YTD ADR (by 17%, or RUB 2,000) and Occupancy (by 25%, or almost 12 p.p.), St. Petersburg’s luxury market actually set the record in operating metrics this year. RevPAR grew by a whopping 47% compared to 2014. The driver for this unprecedented result has been the same as for Moscow’s luxury segment wins this year, with a number of individual leisure tourists perusing the currency advantage to trade up a level in terms of accommodation, and a boosted Russian regional demand.”

Q3 2015 St. Petersburg Luxury Segment (YTD year-on-year)
Q3 2015 St. Petersburg Luxury Segment_26102015.png

Source: STR Global, JLL


Upper Upscale

Both the third quarter and the YTD occupancy in this segment have been the highest this year since JLL started tracking it’s performance (84 and 67%, respectively). However, the ADR gain has been quite moderate, only 3%, or RUB 200. In YTD terms. Still, the revenue per room displayed some very strong growth, resulting in an almost a RUB 1,000 gain vs. last year.

Q3 2015 St. Petersburg Upper Upscale Segment (YTD year-on-year)
Q3 2015 St. Petersburg Upper Upscale Segment_26102015.png

Source: STR Global, JLL


Upscale

“Having spent five months (May-September) in the heat of the battle, with Occupancy not dropping below 80% (registering over 90% in July and August), and riding waves of high demand, hotels in this segment will now be getting ready for the winter slowdown. YTD they stashed a nice reserve benefitting from high rates (almost RUB 5,000), and a strong bottom line performance (RevPAR grew by 27%, or RUB 800).” – Tatiana Veller said.

Q3 2015 St. Petersburg Upscale Segment (YTD year-on-year)
Q3 2015 St. Petersburg Upscale Segment_26102015.png 

Source: STR Global, JLL


Upper Midscale

Upper midscale segment has been the most ‘down to Earth’ this year. While still taking advantage of the overall market’s hype, these properties saw more modest gains in all operating indexes, winning some market share, it seems, from the lower segment. A 6 p.p. increase YoY, to 72% YTD in occupancy, and raising prices slightly, by about a RUB 100, allowed to bring a conservative 11% more to the bottom line in the form of RevPAR.

Q3 2015 St. Petersburg Upper Midscale Segment (YTD year-on-year)
Q3 2015 St. Petersburg Upper Midscale Segment_26102015.png

Source: STR Global, JLL


Midscale

“It has been fashionable to stay in higher category hotels in St. Petersburg this year. Midscale segment benefitted the least from the boost in demand for the city’s room stock, but still registered positive numbers in performance. With a 5% increase in occupancy YTD, and an insignificant (less than 1%) loss in ADR, the lowest priced segment seem to have been a stranger in this triumph of Northern Venice.” – Tatiana Veller concluded.

Q3 2015 St. Petersburg Midscale Segment (YTD year-on-year)Q3 2015 St. Petersburg Midscale Segment_26102015.png
Source: STR Global, JLL


* All statistics are sourced from STR Global with segments based on JLL configurations.


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. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316.0 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56 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, 2014  and 2015 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015, and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.