Moscow hotel maket to grow by up to 15,000 rooms in 5 years

Moscow's hotel market is experiencing a flurry of development, with the number of available rooms set to grow by 37% over the next five years, according to JLL.

The property adviser's H1 2014 Moscow hotel market report shows there are 200 hotels in Moscow with almost 40,000 rooms. Of this number, about a third - 66 hotels or 17,500 rooms - are branded or ‘of quality’.

With little investment activity, it continues to be a development market and a target for developers and operators. The development pipeline is sizeable with 10,000 to 15,000 new rooms anticipated in the next five years – mostly in economy and midscale segments. The Moscow pipeline includes Four Seasons (180 keys), Marriott Novy Arbat (234 keys), Radisson Sheremetyevo (379 keys), Hampton Strogino (214 keys).

'International arrivals have grown from 3.5 million in 2009 to 5.5 million in 2013. Over 70% of guests in branded hotels are foreign, the average for the city is 35%,' said David Jenkins, head of JLL’ Hotels & Hospitality, Russia & CIS.

Some 70% of hotel demand is corporate, with little leisure. The period from 2002 to 2008 saw average annual revenue per available room (RevPAR) growth of 13%. This led to a 35% drop in 2009. Occupancy rates have mostly recovered but the average daily rate (ADR) has not. Occupancy levels range from 65% to 75% with top ADR’s around RUB 17,000 (€363).

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