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Rambler's Top100
Rambler's Top100
Hotel Consulting and Development Group



Usually in May, the market of the Moscow hotels undergoes certain changes, which are related to the breaking out of spring coupled with almost two consecutive weeks of bank holidays. On one hand, business customers flock from Moscow to their country homes or sunny destinations such as Turkey, or the Black Sea beaches. On the other, foreign leisure travelers, usually in groups, are attracted to the capital on account of the pleasant extended daylight, warm temperatures and heavy promotion of package tours usually combined with a visit of historical towns around the Golden ring and St Petersburg.

During the first days of May, the exodus of Muscovites can be felt in destinations such as Sochi, where the 238-bedroom resort hotel “Radisson Lazurnaya” recorded full occupancy for the first short break in May. Full occupancy is less common in Moscow city hotels during this period. In fact, most hotels actually record temporary drops during the first two weeks. In addition, Moscow is still struggling to develop year-round event planning and conferencing. Other demand sources to bridge the gap caused by the outpouring of business clients during the first two weeks of May have not yet been successfully nurtured. Average occupancy of the majority of Moscow hotels in the first half of May ranges between 15% and 40% during this seasonal through.

Certain hotels such as the Tatiyana and Novotel Sheremetyevo, albeit, have overcome this seasonal problem by negotiating extensive long-term corporate contracts with large companies. These are more the exception than the rule. Other exceptions to this trend include the Le Meridien Country Club and the Holiday Inn Vinogradovo. The latter has positioned itself as a country hotel. The Meridien Country Club is the only hotel to offer a golf course facility in the Moscow outskirts, and has thus secured its market niche through this unique selling proposition. Still, it is interesting to note that consumer behaviour is changing in favour of short leisurely breaks outside the Moscow city centre as an alternative to country homes.

The bank holidays during the first half of May caused a significant decrease in business activity. Hence, during this period, occupancy rates at top segment hotels have reported a drop of 1.5% but an increase in ADR of almost $ 2.00 in comparison with April statistics.

In contrast with the last year Moscow top segment hotels have considerably improved their performance levels. The top segment hotels reported an average rise of 8.8% in RevPAR in comparison with last May. The improvement is accounted for based on an increase in ADR and a reduction in discounting rather than increase in occupancy. In the mid-tier and lower categories (3 star and lower) occupancy for the first ten days of May ranged between 30 and 50%. As a basic rule, occupancy tends to rise as rates become cheaper. Thus, the bottom hotels recorded an average occupancy of 79%, but with room rates around $24.00. Hotels positioned in the three star category recorded average occupancy for May between 60 and 70% with room rates averaging at $88. Such fluctuations represented a drop of approx. 1.5 to 2% in comparison with April.

If we consider the strong demand for hotels positioned in the 4 and 5 star hotels as a whole, such indicators testify to the consistency in guest demand for high quality Moscow hotels. We expect for these high levels in performance to prevail in the short term.

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