Signs of Downturn in Russia Come with Hope
FEBRUARY 2, 2009 - Obvious signs revealed by MKG Hospitality's database, Hotel CompSet suggest 2009 will be a bumpy ride for Russian hoteliers, as Occupancy Rate and RevPAR decrease. Moscow has experienced the first signs of the economic downturn, with a five-point drop in chain hotel Occupancy Rate (OR) for 2008, reaching 70%.
Average Daily Rate (ADR) ended the year at EUR251, only a 5% increase compared to 2007, whilst Revenue per Available Room (RevPAR) decreased slightly to EUR175.
'These performance indicators released by our market monitoring database, Hotel CompSet, clearly illustrate the first phase of the downward cycle. Although Russia is an emerging market for hotel developers, and indeed will become a goldmine destination in the years ahead, the economic crisis has hindered performance in 2008,' stated Director of Development, MKG Hospitality, Vanguelis Panayotis.
This drop in OR was also fuelled by many new hotel openings in 2008, increasing competition. 'Soon we will see ADR decreasing, as demand will continue to be low and hoteliers will be pushing to fill their rooms. This of course will ultimately drive RevPAR down,' added Panayotis.
According to MKG Hospitality, the economy should slowly recover in 2010-onwards, and when it does, the country will see many major hotel developments.
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