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News Release

​Moscow

A Look Back at the Winter Season 2016-2017 Results: Not All Doom and Gloom for Quality Hotels in the Russian Resort Markets


​Moscow, 30 February, 2017 – JLL presents the 2016-2017 winter quality resort hotels market results in Sochi* and Moscow Region.

“One could expect that with the ruble strengthening and stabilizing, and reopening of long-time favorite destination of Russian vacationers – Turkey – the winter season of 2016-2017 should not be as strong as the previous one.” – Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, says. – That has not been the case, however – quality hotel stock both in Sochi as well as in the Moscow Region resorts showed very strong performance in terms of occupancies and RevPAR. Of course, during some months of the winter some clusters had to ‘give’ slightly in terms of pricing, so ADRs may have suffered here and there, but in general, we can say that the habit of traveling to local destinations seems to have settled in with Russians.”

The average seasonal occupancy in the Sochi mountain cluster has been in ‘14-’15 at 50%, a year later 62% of quality hotel rooms have been occupied, and 66% this year. The average rate decreased by 7% compared to the winter season of 2015-2016, but the mountain cluster hotels managed to keep the revenue (RevPAR) at the level of last season – slightly above RUB 5,000.

​Winter Sochi Mountain Cluster Quality Hotel Market Results, Upper Segments
Winter Sochi Mountain Cluster Quality Hotel Market Results, Upper Segments_30032017.png

Source: STR Global, JLL

“Winter is obviously not the peak season for Sochi coastal cluster, but despite this, quality hotels by the sea managed to increase the main operational indices. The occupancy in the winter season has been growing by about 3 pp per year over for three last years – it was 26% in 2014-2015, 29% in 2015-2016 and about 32% this winter. Together with the ADR growth (by almost RUB 800, or 12% compared to the previous year, and more than RUB 2,000 (or 40%) compared to the 2014-2015 season), this naturally leads to an increase in revenues –  RevPAR added almost RUB 600 (or 31%), and RUB 1,100 (83%) respectively,” – Tatiana Veller comments.

“We noticed that in February this year the operational indices in Sochi coastal cluster quality hotels were the highest for the winter season in past three years: ADR at RUB 8,300 with a 49% occupancy and RevPAR at almost RUB 6,800.”  

Winter Sochi Coastal Cluster Quality Hotel Market Results, Upper SegmentsWinter Sochi Coastal Cluster Quality Hotel Market Results, Upper Segments_30032017.png

Source: STR Global, JLL

For Moscow Region quality hotels, this winter was also more successful compared to last year: occupancy grew by 1 pp (and reached 48%), ADR by 17% (to RUB 5,550), which led to an increase in RevPAR by 18% (to RUB 2,700). The busiest month here was as well February 2017 – with occupancy reaching almost 56% and a healthy RUB 5,000 ADR. In terms of revenues, January stood out, with a rate hike for New Year holidays, which resulted in RUB 6,550 ADR and 3,000 RevPAR – the highest for the last two winter seasons in this market. 

Winter Moscow Region Quality Hotel Market Results
Winter Moscow Region Quality Hotel Market Results_30032017.png

Source: STR Global, JLL

“In conclusion, it seems like the recent winter season for quality accommodation both in typical (mountain) and not typical (sea, Moscow Region) markets has been strong. It was probably helped by increased certainty in consumer’s minds about the future, and thus readiness to spend on vacations, but not yet a strong enough domestic currency for this spending to overspill abroad. What will really show if this is a sustainable trend is the upcoming summer season, which a lot of tour operators already forecast to be a rebound of cheap sun & sea travel outside of Russia.” – Tatiana Veller adds.


* The analysis is based on STR Global data for quality hotels: in mountain cluster – from Upper Midscale to Upper Upscale segments, in coastal cluster – Upper segments.


About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and on behalf of its clients managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset 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, 2006-2016 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, 2016, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015.