Skip Ribbon Commands
Skip to main content

News Release


Moscow quality hotels occupancy approached 70% in H1 2017

Luxury is the only segment to show decline in all operational indices

Moscow, August 01, 2017 – JLL presents the H1 2017 results of the quality hotel market*  in Moscow and the Moscow Region.

According to Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, Moscow’s quality hotels have set a new 5-year record – nearly 70% of the room stock was occupied in the Russian capital in the first 6 months of this year. Notwithstanding the branded supply growth in the period by 1,200 rooms, market average occupancy increased by 2 ppt. At the same time, ADR dropped by 0,5%.

“This price dynamic can be explained by several main reasons: increasing competition, very specific demand type (sports fans, tourist groups) and supply growth which is concentrated in the cheaper market segments, thus putting pressure on the ADR. As a result, RevPAR showed only slight growth (1.4%), but still exceeds the number for the last 5 years – RUB 5,100.” – Tatiana Veller comments.

H1 Moscow quality hotel market results
01 08 1H1 Moscow quality hotel market results.png
Source: STR Global, JLL

In June, all segments of quality hotel market in Moscow experienced ADR growth, while the majority of them also displayed record-breaking occupancy. This fact is not surprising: FIFA Confederations Cup coincided with the hot tourist season. Combination of these events helped hotels not only to keep ADR on the relatively high level, but also to gain required demand volume. Most of the foreign demand obviously gravitated to the more expensive hotels, thus supporting their operational performance, while domestic and more price-sensitive inbound demand redirected to more budget-friendly accommodation options. For example, in June the upper midscale segment occupancy skyrocketed to 90%. 

“In general, H1 2017 results can be divided into two groups: in the first one RevPAR increased through occupancy growth in the context of stable ADR, while in the second minor losses in RevPAR occurred due to the lack of positive demand dynamics, which encouraged hoteliers’ attempts to at least protect the ADR.” – Tatiana Veller says. – “The first tendency can be observed in the Upscale and Midscale segments: 6% and 7,5% RevPAR growth, to RUB 4,700 and RUB 2,800 respectively, on the back of occupancy rising by 5.4 and 3.4 ppt. At the same time, Upper Upscale and Upper Midscale segments declined in RevPAR by 0.4% and 0.2% in the context of minimal fluctuation in occupancy and ADR compared to 2016.” 

“Luxury segment is worth mentioning as an exception from rule above. It is the only one to show negative operational performance dynamics compared to last year: occupancy for H1 dropped by 1,6 ppt, ADR – by 1.2%, bringing RevPAR down by 3.7% - to RUB 11,000. At the same time, luxury hotels still exhibit the highest level of operational indices in last 10 years.” – Tatiana Veller adds

Moscow Region’s quality hotels are increasing ADR and RevPAR for the third year in a row. Suburban resorts in the Moscow region this year will likely to be perceived as less attractive than available outbound destinations, that’s why hoteliers focused their attention on generating demand from higher-paying guests. On the back of slight occupancy decline compared to the last year (by 0.4 ppt, to 46.7%) and ADR growth by 5,6% (to RUB 5,100), RevPAR in this segment rose by 4.7% and amounted to RUB 2,400. 

H1 Moscow Region quality hotel market results
01 08 02H1 Moscow Region quality hotel market results.png
Source: STR Global, JLL

“We expect that 2017 for the Moscow quality hotel market will finish at approximately the previous year’s operational performance level. Short boost brought by FIFA Confederations Cup will help eliminate the negative impact of the price sensitive tourists fleeing the market because of the gradual price increases that Moscow hoteliers are using in their efforts to optimize revenue.” – Tatiana Veller concludes.

*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 the end of the first quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 78,000. As of March 31, 2017, LaSalle Investment Management had $58.0 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.