Living in hotels in Kiev has become more expensive: what will happen next
For the first time in 5 years, a decrease in average market operating indicators was observed in the hotel market of the capital
The operational activities of hotels in Kiev at the beginning of the year decreased, while the cost of living is growing. What is happening on the hotel market of the capital and what prospects did the capital real estate portal 100realty.ua recognize.
Stagnation or growth?
Experts disagree about what the situation is in the hotel market in Kiev. According to JLL, for the first time in 5 years, a decrease in average market operating indicators was observed in the hotel market of the capital. These were the results of the first half of the year. Moreover, the situation was different depending on the class of the hotel. Mid-range hotels kept the load, but expensive hotels experienced a drop in demand.
According to Radomir Tsurkan, managing partner of CBRE, according to the results of the 1st half of 2019, the average occupancy rate of Kiev hotels was 51.7% (+0.9 pp y / y). The highest occupancy rates were observed in May-June and amounted to 58.4% and 59.2%, respectively. At the same time, the average rate of return of one room (RevPAR) indicates an improvement in the operational efficiency of Kiev hotels. According to the results of the 1st half of the year, RevPAR grew to UAH 1,366. (50.7 dollars) on average over the period, which amounted to an increase of + 14.4% y / y.
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According to the expert, the improvement in operational efficiency is not so much a consequence of the growth in demand for hotel rooms (+ 3% y / y), but rather an increase in the average room cost (ADR), which increased + 14.4% y / y to the level of 2 654 UAH (98 , $ 6) in the 1st half of 2019.
Kiev hotel market
What did they build
In the first half of 2019, the Riviera boutique hotel was opened on the street. Peter Sagaidachnogo after rebranding, which lasted from 2014, where the updated hotel room fund is 67 rooms.
“In addition, the Monotel network of futuristic capsule hotels is actively developing. The network plans to expand due to the opening of 3 hotels in the 2nd half of 2019, ”says Mr. Turcan.
More opening of large hotels in Kiev before the end of the year is not planned.
What will happen next?
The market will develop. According to experts, Kiev is becoming more interesting for tourists. According to the Kyiv City State Administration for the 6 months of 2019, 900 thousand tourists from different countries visited Kiev. In 2018, according to the Kiev city administration, in Kiev came to 4.5 million tourists, of which 60% -. It’s visitors from other countries, and the rest – the Ukrainians. At the same time, those who came to work were not taken into account, but only people whose purpose of visiting Kiev was tourism. The average length of stay in the capital is -2-2.5 days. If before about 50% of tourists were from the Russian Federation, now they are residents of Belarus, Germany, Turkey, Israel, the USA, Ireland, and Great Britain.
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Ryanair Airlines claims that booking tickets to Kiev has grown by 1537% compared to last year.
“We expect further development of the hotel market in Kiev, given the improvement in the economic situation and the growth in passenger traffic at the airports of Kiev, which, according to the results of the 1st half of 2019, grew by 21% yoy. So, at the Boryspil airport, this indicator increased by 25%, and at the Kiev airport (Zhulyany) – by 5%. At the same time, we expect an increase in occupancy rates in Economy and Midscale hotels. As for the hotels of a higher class (Upper midscale and Upscale), their active dynamics are not expected in the coming years, and the demand for rooms will not significantly exceed the indicators of previous periods. A separate area of activity for hotels of this class is the development of apartments. We expect a significant increase in the new supply in the hotel real estate market in the 2nd half of 2019-2020 due to the commissioning of construction in progress, as well as hotels that are under reconstruction, ”says Radomir Turcan.