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News Release

Moscow

Q1 2017 Moscow quality hotel market results: Luxury segment’s indices fall, Midscale climbs up


Moscow, 27 April, 2017 – JLL presents the Q1 2017 results of the quality hotel market*  in Moscow and the Moscow region.

“The market in the Russian capital is still riding strong, gaining volume of rooms sold in most segments and rates in some. Overall, the weighted market average occupancy of the quality hotels in the Russian capital had risen 2.6 ppt, and reached 62.1%, the highest Q1 YTD number in at least 5 years. Average marketwide ADR has dropped by mere RUB 44, representing a 0.6% loss, to RUB 7,450. RevPAR still managed to climb a healthy 2,2% - to RUB 4,480.” – Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, says.

​Q1 Moscow quality hotel market results
Q1 Moscow quality hotel market result.png 

Source: STR Global, JLL

Surprisingly, the segment in this quarter that lost a little bit on all fronts first time in at least 4 years was Luxury. Occupancy here dropped by 3 ppt (to 55%), rate by 1% (to RUB 17,250), and as a result the revenue per available room was 6% less, RUB 9,450. “This is probably because the segment has been riding high and making large gains in many previous periods or maybe because the ruble had been appreciating further against hard currencies, and splurging on unreasonably high-end accommodation became less affordable for foreign traveler.” – Tatiana Veller comments.

The segment that recorded the largest RevPAR gain was, of course, Midscale. “We say ‘of course’ because the market has been fueled by domestic business and leisure travel and group tourist business for a while, and that’s high-volume, relatively inexpensive demand.” – Tatiana Veller notes. – “The occupancy growth was very large here, by 7 ppt, to 66% - this is higher than any other segment this quarter, and higher than this segment has been in at least 5 years! So, even with a few rubles’ loss in ADR, the RevPAR managed to bring additional 11% to the bottom line for the owners.”

The suburban resorts in the Moscow Region also had a good start to the year. Here RevPAR grew by 6% – to RUB 2,500 – due to an increase in the average rate by 11%, to almost RUB 5,500. At the same time, the occupancy dropped by 2 ppt, to 46% amidst growing prices.

Q1 Moscow Region quality resorts market resuls
Q1 Moscow Region quality resorts market results второй.png 

Source: STR Global, JLL

“According to our estimates, April will support the positive dynamics of the market, due to business travel and MICE demand and will become another successful month for most segments of the Moscow hotel market. In June, Moscow will welcome guests of the Confederations Cup as a small rehearsal for future sporting events of 2018. This event will likely bring an upsurge in rates, as hotels will expect more demand, but with a high probability restrain the occupancy: regular tourists and business travelers will plan trips and events so as not to mix with a crowd of football fans.”- Tatiana Veller predicts.

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



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, 2006-2017 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.