The key month of June was positive for all hotels with occupancy and rate coming in higher than June 2012 over all segments.
"A record June in terms of occupancy and average rate for the Luxury and Upper Upscale hotels in St. Petersburg cannot hide the fact that the overall trend in the city is down year on year for both segments. It is the Midscale hotels that are showing impressive growth in the first 6 months of 2013," - reports David Jenkins, Head of Jones Lang LaSalle' Hotels & Hospitality Group, Russia & CIS.
Results in brief:
- In June 2013 Luxury hotels reached an ADR over RUB 26,000;
- Upper Upscale saw occupancy of 77% in June;
- With ADR close to RUB 5,000 Upscale segment seems to be offering good value for corporate clients to drop down from segments above;
- RevPAR growth of 19.5% for H1 2013 in Upper Midscale;
- Midscale saw the ADR growth to RUB 2,800.
St. Petersburg Hotel Market in detailsLuxuryOccupancy is down year to date by 8% with a similar increase coming in ADR, bringing a flat RevPAR to H1 2012. "June saw a strong growth in occupancy to over 74% and ADR to over RUB 26,000", - David Jenkins says. – "It does though seem that rate increases are scaring off some clients in general. Half year occupancy for the segment is just above 40%."
St. Petersburg Luxury Segment Jan-June 2013 (year on year)
Source: STR Global, Jones Lang LaSalle
Upper Upscale
A 5% drop in occupancy is matched by a 5% increase in ADR, a similar trend to the luxury segment. "Clearly price increases have led to drops in occupancy in the upper tiers demonstrating high sensitivity to price increases in the city," – David Jenkins notes. – "June saw occupancy of 77% for this segment and ADR at RUB 16,000, yet the year to date ADR sits at RUB 7,900.
St. Petersburg Upper Upscale Segment Jan-June 2013 (year on year)
Source: STR Global, Jones Lang LaSalle UpscaleA growth of 4% in occupancy and the same in ADR has led to a solid 8% growth in RevPAR so far this year for this hotel cluster. With ADR close to RUB 5,000 for the year the segment seems to be offering good value for corporate clients to drop down from segments above.
St. Petersburg Upscale Segment Jan-June 2013 (year on year)
Source: STR Global, Jones Lang LaSalle Upper Midscale
There has been a significant jump in occupancy within this segment, from 56% year to date in 2012 up to 63% year to date in 2013. At the same time, ADR has grown almost 7% bringing an impressive RevPAR growth of 19.5% for H1 2013 over the same period in 2012. "We see most of the growth coming in this segment which offers strong brands for the corporate and leisure guest at competitive pricing, although the year to date ADR is just RUB 1,000 below the segment above," – David Jenkins comments.
St. Petersburg Upper Midscale Segment Jan-June 2013 (year on year)
Source: STR Global, Jones Lang LaSalle
MidscaleThe 12% growth in RevPAR is coming mostly from a boost to ADR of 10% over the same 6 months in 2012 – to RUB 2,800.
St. Petersburg Midscale Segment Jan-June 2013 (year on year)
Source: STR Global, Jones Lang LaSalleKiev Hotel Market highly competitive Jones Lang LaSalle's Hotels & Hospitality Group announces the H1 2013 Kiev hotel market results.
"The Kiev hotel market, for a number of reasons, is proving to be highly competitive and as expected is showing a decline in performance in 2013 compared with 2012. For the first 6 months, the ‘branded market' is down in RevPAR by almost 32% compared to the same time period last year – an alarming situation. This is coming through a drop in occupancy for the year of 10% and a drop in average rate of over 20%," - reports David Jenkins, Head of Jones Lang LaSalle's Hotels & Hospitality Group, Russia & CIS.
Results in brief:
- Occupancy dropped to 48.3% in H1 2013;
- Average rate dropped from USD280 in H1 2012 down to USD212 this year to date;
- In June 2012, during UEFA football championship, saw a city ADR of USD446 with June 2013 at USD207;
- With the opening of hotels such as Ibis, Holiday Inn and Ramada Encore, there should be a hope for European weekend break business segment to grow.
Kiev Hotel Market in detailsThis year the city occupancy is sitting at 48.3% compared with 53.5% last year. The boom in hotel openings in the past few years has led to an intense competition in the city for any corporate and limited leisure business that comes in. Aligned with the well documented financial and political challenges in Ukraine, the downward trend looks set to continue with several new hotels still expected to open in the city over the next few years, including a Park Inn, Hilton and a Renaissance.
The 10% drop in occupancy is not as bad as potentially it could have been, given the new hotel supply in the market. "We see the significant drop in average rate – from USD280 in H1 2012 down to USD212 this year to date," - David Jenkins says. – "On the one hand, the city has been well recognized as being ‘expensive' for hotels, especially when there were so few brands on the market. With the opening of hotels such as Ibis, Holiday Inn and Ramada Encore, the city is now able to offer slightly more affordable options."
At the top end of the market the opening of the Fairmont in 2012 created a stronger price competition amongst the higher end hotels – including Hyatt and Intercontinental. There were simply too many available rooms for the limited high-end business coming to the city. Inevitably prices are dropping across the board.
It is though important to note that in June 2012, Kiev hosted the UEFA football championship. If we compare the results just for June 2012 v 2013 we can see that the major impact the football had was on average rate. June 2012 saw a city ADR of USD446 with June 2013 at USD207. Occupancy was flat year to year.
So if we remove the June figures as an ‘event influenced' change, the drop in ADR for the year comes in at a 14% drop – still significant.
David Jenkins comments: "Despite a visa free regime for most travelers, Kiev has been unable to tap into the lucrative European weekend break business, though again given the drops coming in prices and the availability of more hotels at better rates – there should be hope for this segment to grow and help boost occupancy in a city that should really be on the list of top European cities to visit. The opening of new airport terminals last year and more direct international flights should also be helping."
Kiev Hotel Market Jan-June 2013 (year on year)
Source: STR Global, Jones Lang LaSalle
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square meters and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.3 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Aktau. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. About Hotels & Hospitality Group
Jones Lang LaSalle's Hotels & Hospitality Group serves as the hospitality industry's global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centres; mixed-use developments and other hospitality properties. The firm's more than 265 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totalling nearly US$25 billion, while also completing approximately 4,000 advisory, valuation and asset management assignments. The group's hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.
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