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Moscow hotels' RevPAR soars 52.1% in H1 2018

Moscow, July 25, 2018 – The average room price (ADR) in H1 2018 increased by 42.4% year over year and reached 9,334 roubles per room and the revenue per available room (RevPAR) was 6,676 roubles per room, which is 52.1% higher year over year. The average occupancy of Moscow hotels in H1 2018 was 71.5%, an increase of 4.6% year over year.
The World Cup caused rapid growth in the operating indicators of Moscow hotels in all market segments. The increase started in May, when FIFA officials and others associated with the event's preparations began arriving the capital. In June 2018, Moscow hoteliers were able to increase their profitability rates to record levels, primarily due to room rates hiked to historic highs during the championship. Depending on the segment, the increase in ADR varied from 250% to 400% year over year, and RevPAR rose anywhere from 270% to 440% year over year. The Russian government set the ceiling for accommodation prices in cities hosting the World Cup, in connection with which some Moscow hotels reached maximum possible increases in RevPAR.
Moscow's luxury hotels benefited the most from the World Cup. FIFA delegates, technical experts and other officials, as well as the teams based in the capital formed considerable demand for this category of hotels. In January-June 2018, ADR in luxury hotels  jumped 67.8% and the profitability index in the segment soared 75.9% in annual terms.
In H1 2018, Moscow gained a total of 953 rooms in four new hotels, three of which are located close to the city's airports. The number of new rooms in H1 2018 was less than expected because the openings of such hotels as Pentahotel on Arbat and Radisson Blu Olympic on Samarskaya Ulitsa were postponed to H2 2018. 

 

Main hotel openings in H1 2018

Name

Operator

Number of rooms

STR segment

DoubleTree Hilton Moscow – Vnukovo Airport

Hilton Worldwide

432

Upper Upscale

Holiday Inn Express Moscow – Sheremetyevo Airport

InterContinental Hotels Group

198

Upper Midscale

Holiday Inn Express Moscow – Khorvino

InterContinental Hotels Group

171

Upper Midscale

Ibis Moscow Domodedovo Airport

AccorHotels

152

Midscale

 
Source: Colliers International

The leading segments in terms of occupancy growth in H1 2018 were upscale / upper midscale and midscale, with increases of respectively 6.5% and 5.1% year over year. At the same time, unlike other segments, upscale, upper midscale and midscale occupancy trended upward in each of the past six months year over year. 

Evgenia Tuchkova, associate director of business development, consulting department, Colliers International Russia: “Holding the World Cup in Russia contributed to the formation of deferred demand for our country as a tourist destination. First of all, many foreign World Cup attendees visited Russia for the first time. It is expected that many of them will return in order to tour the country in a more relaxed atmosphere. Visa-free entry to Russia before the end of 2018 via Fan ID under the decree of the President of the Russian Federation plays a significant role. It is also worth mentioning that some tourists postponed visits to Moscow until after World Cup, and their arrivals will be distributed across the following months. Taking into account these circumstances, we expect that during H2 2018, the occupancy of Moscow hotels will be higher year over year.”