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News Release

Moscow

Q1 2017 Sochi sea and mountain quality hotel market results – ADR in the mountain and sea clusters almost equal


Moscow, 26 April, 2017 – JLL presents the Q1 2017 Sochi quality hotel market results*.

“We thought, when reporting on the winter ’16-17 results, that we’ve seen the potential of this market already, but we’ve been proven wrong. The ski season in Krasnaya Polyana seems to have extended into the first spring month this year, and the strengthening rouble and stabilizing economy gave reasons to our compatriots to vacation more on the Feb 23rd – March 8th streak of holidays, it seems.” – Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, comments.

Mountain cluster hotels have registered a highest average quarterly occupancy in our recorded history – 72.5% vs. 70.4% a year earlier, 61.1% in 2015 and 46.4% in the Olympic 2014. That’s a more than 25 ppt increase in just three years! This came at an expense of a slight (7%, or RUB 600) drop in ADR in Q1 2017, to RUB 7,450, but this may very well have been a conscious measure by hoteliers there to attract volume and create loyal guests for the years ahead.


Q1 Sochi mountain cluster quality hotel market results, Upper segments
Mountain cluster первый график.png


Source: STR Global, JLL


By the sea (in the downtown and Imeretinskaya Valley) market players have also enjoyed some growth in the number of rooms sold – a 2 ppt increase vs. YTD results of Q1 last year and a 10 ppt growth compared to 2015. “Here the average rate increased by 14.6%, or RUB 900. As a result, the seaside hotels almost closed the ADR gap with mountain resorts in their traditionally low season – RUB 7,100 by the sea versus RUB 7,400 up in the mountains – quite a unique situation. For reference, in Q1 2016, the rate in the sea cluster was almost one-fourth lower than in Krasnaya Polyana,” – Tatiana Veller says. – “This positively affected the profitability of hotels: RevPAR jumped up by 19% (about RUB 500) compared to previous year.”


Q1 Sochi coastal cluster quality hotel market results, Upper segments
Coastal второй график.png


Source: STR Global, JLL


“Both mountain and sea clusters in the past few years have shown positive dynamics even in ‘atypical’ seasons. An additional factor for Sochi’s success this summer, besides still weak national currency which limits Russians’ ability to travel abroad, should be the Confederations Cup in June, which will make use of sports and hotel infrastructure in four Russian cities,” – Tatiana Veller concludes.

*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.​