2002-12-01
How many hotels are there in Moscow? Even official statistics aren’t quite sure. For 2001, the National Committee of Statistics (Goskomstat) recorded 149 hotel objects and an accommodation supply of 63,231 beds. At the same time, other statistical sources claim that the city’s hotel supply is larger with 170 hotels objects and 75.000 beds. So, where’s the truth?…
In the quest for a definite answer to this
question, the experts of Hotel Consulting and Development
Group together with the Architectural Committee of the Moscow City Government (НИиПИ) have undertaken a statistical inventory
of existing city hotel supply. The results of this analysis were
surprising despite the relative calm in the hotel
market following the 1998 financial crisis and the dwindling interest the
investors for Moscow hotel assets. In the last four years, close to 50 new
hotels have surfaced. If in 1998 the capital counted 185 accommodation units,
of which, 170 hotels, then the increase in 2002 has been substantial. The number
of accommodation units based on the data provided by Architectural Committee
grew by 50 units to 235. From this number, hotels rose by 48 units from 170
hotels in 1998 to 218 in 2002. The current hotel capacity has already exceeded
the anticipated supply planned for 2005 by 78,5 thousand beds.
Quantitative growth of the Moscow hotel
supply is a direct consequence of the consistent economic recovery since 1998
and further stabilization of the local economy. The improvement in economic
condition has been accompanied by a rising demand for hotel services in the
capital. According to the predictions of the Tourism Committee of the Moscow
Government, total foreign visitors to Moscow will reach two million by the end
of 2002. The growth in tourism arrivals already exceeds last year’s figures by
26%. Such strong growth in visitor influx to the capital is accompanied by
increases in hotel supply.
Based on the urban planning documentation
provided by the Architectural Committee of the Moscow city Government, the city
should expand its hotel supply by 23 hotel units in the Central districts by
2005. Only land parcels with related
permission documents for hotel development have been used to determine the
future supply. HCD Group specialists assisted the Moscow City Architectural
Committee with development scenarios for the land parcels allocated for hotel
development, though much of the estimated growth in hotel supply fundamentally
depends on the speed of development and the level of investment required to
bring the proposed hotels to completion. Even when applying the most
conservative assumptions, hotel supply in Moscow is expected to increase by
15.000 hotel rooms by 2010, generating no less than $300 million in annual
revenue.
Certainly, the urban
development plans of Moscow hotel industry can please some, but at the same
time, they do not consider internal market dynamics. As a caveat, each project
must be independently analyzed to determine its feasibility in terms of
concept, positioning, affiliation, management structure and facilities mix,
supply and demand analysis and financial feasibility. Urban development plans
tend to be static in nature and broad, as they only consider the impact of the
hotel supply as whole, without considering particular conditions applicable to
each individual hotel object. Attentive conceptual and financial preparation
must be undertaken before the actual implementation of each hotel development
scheme in order to assure its successful entry into the existing competitive field.
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