JLL analyzed the growth of branded room supply and plans for new openings in hotel markets of Russia, CIS and surroundings in 2017. In H1 2017, more than 2,200 rooms have been already added to the room inventories around the region; that is roughly the same as this time last year. In Russia alone, about 1,900 new rooms were put into operation, as compared to 1,700 a year earlier.
“As 2017 draws to mid-summer, the forecasts of new room stock in Russia and the surroundings[1] have been revised. According to the corrected in June 2017 plans of hotel brands, the market should receive 8,100 new keys by the end of 2017. This is a reduction by 15% (or 1,500 rooms) compared to the predictions of early 2017” Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, comments. “A number of projects in the region were postponed to 2018 (approx. 3,200 rooms), but partially replaced with some newly signed management or franchise contracts with this year’s opening date.”
“What for Russia specifically, here the prognoses changed also: roughly 2,000 rooms got moved to 2018 and 431 new keys where announced, thus reducing the size of expected new room stock by over 1,500 – to 5,100 rooms,” Tatiana Veller adds.
The most active market in the reported geography is still Moscow (with Moscow Region), where almost a half of all planned for this year room stock has already opened (1,200 with 1,400 left to go). St. Petersburg already brought to the market both of its projected openings for this year (388 new rooms). If all plans for new openings are realized, this will bring the total number of quality hotel keys in just Moscow to 32,100 and increase the inventory in the city by almost 10%.
“In terms of geographies, among larger markets the most active start of the year has been recorded in Kazakhstan (we assume, due to preparations for Expo 2017) – 41% (or, 460 out of 1,100) planned rooms already opened (all in Astana). Cities like Minsk, Tashkent, Yerevan, Sochi, Elabuga disappeared from the map of projected branded additions. New entrants are: Yakutsk, Bakuriani and Ureki” Tatiana Veller says.
Top 3 chains by volume of expected openings due to shifts in plans reordered from Marriott/Starwood - Hilton - Accor to Marriott/Starwood - Accor - Hilton. Most active branded operator in the first half of the year has been Accor - the group has already started receiving guests in 61% of its announced for 2017 rooms (760 out of 1,200). Hilton already opened 58% of its planned rooms (700 out of 1,200), and Marriott/Starwood – only 1 hotel (160 rooms) so far (10% of the annual plan). Notably, Azimut already opened both of its hotels announced for the year – Smolenskaya (full renovation) and Yakutsk (rebranding).
“Dynamics of the openings show a clear and direct correlation to the activity, which brings new tourists into each market – mainly, large-scale international events. Three cities make up for a half of the projected number of new hotel rooms in the covered region (4,000 out of 8,100): Moscow and St. Petersburg with Confederations Cup and preparation for World Cup, Astana hosting Expo 2017 this year” Tatiana Veller notes. “Additionally, Tbilisi continues to attract a lot of tourists and hotel investors (planning to add yet another 660 rooms to its already sizeable branded inventory this year). Renewed interest in Kiev as it gets ready for a series of large-scale events in the nearest years demonstrates the return of investors’ trust in hotel business in the Ukrainian capital.”
