2010-12-31-莱坊-Moscow_Hotel_Market_Q3_2011_5页_650kb

Q3 2011 Moscow Hotel Real Estate Market Summary

Core Content

The Q3 2011 Moscow hotel real estate market report provides an overview of the supply, demand, and performance of hotels in the Russian capital, highlighting both the challenges and opportunities in the sector.

Main Indicators

Supply

• The total hotel supply in Moscow increased by 770 rooms (2.5%) in the first nine months of 2011, driven by the addition of the Vega hotel (3★, 967 rooms) to the Best Western chain.
• Several hotel openings scheduled for Q3 2011 were postponed, with only two major openings expected by the end of the year.
• The Vega hotel is the largest international brand hotel in Moscow, contributing significantly to the increase in international branded rooms, which reached 10,000.
• The transfer of existing hotels to international management (e.g., Sheremetyevo-2 to Park Inn in 2010) is a rare occurrence in the Moscow market.

Demand

• Business tourism dominates the demand for hotel accommodation in Moscow, leading to a seasonal decline in occupancy during the summer months.
• Occupancy levels at 3-5★ hotels in Q3 2011 were almost unchanged compared to the same period in 2010.
• The occupancy at 5★ hotels increased by 3.8 percentage points due to political events in Moscow.
• Moscow's average occupancy for 4-5★ hotels was slightly over 60%, compared to more than 70% in major European cities.

Commercial Terms

• The average room rate (ARR) at 3-5★ hotels increased by over 10% in US$ compared to the same period in 2010.
• Despite a decline in ruble terms, the steady occupancy and growth in ARR led to an increase in profitability across all hotel categories.
• RevPar (Revenue Per Available Room) grew by 10% on average across the market compared to the same period in 2010.
• Moscow remains in fifth place in Europe by room rates and RevPar, indicating strong commercial performance despite lower occupancy.

Forecast

• Only two of the five major hotel openings scheduled for H2 2011 are expected to be completed by the end of the year.
• The Intercontinental Moscow Tverskaya (5★, 203 rooms) and Courtyard by Marriott Moscow Paveletskaya (4★, 170 rooms) are set to open, marking the first Intercontinental hotel in Russia and the first Mercure hotel in Moscow (postponed to February 2012).
• The total supply increase for 2011 is expected to exceed 1,100 rooms, which is a high figure for the Moscow market but less than in 2010.
• The positive trend in operating results is expected to continue, though the pace of improvement may slow.

Key Events

• In June 2011, Mikhail Shishkhanov, president of Binbank, acquired 49% of Dekmos, which is reconstructing the Moskva hotel.
• Moscow city hall decided to auction Gostinichnaya Kompaniya, which owns 11 2-3★ hotels with 4,000 rooms.
• Rosatom sold the Baikal hotel for 426.5 mln rubles at the end of July 2011.
• The Moscow Architecture Committee announced a new plan for hotel development in the city's administrative territories.

Summary of Trends

• Supply: Increased by 2.5% over nine months, with the Vega hotel playing a key role in boosting international branded room count.
• Demand: Seasonal decline in occupancy during summer, but overall occupancy remained stable compared to 2010.
• Performance: Positive trend in operating indicators, with ARR growth and stable RevPar.
• Market Position: Moscow remains competitive in Europe for commercial performance but lags in occupancy levels.

Conclusion

The Moscow hotel market in Q3 2011 showed resilience and continued growth in operating indicators, driven by higher room rates and strategic developments. However, the market faces challenges due to the seasonal nature of business tourism and the relatively low occupancy compared to other European cities. The forecast indicates a continuation of the positive trend but with a slower pace of improvement.