H1 2024 | Russia | Moscow | St. Petersburg | Hotels
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H1 2024 | Russia | Moscow | St. Petersburg | Hotels
30.07.2024
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KEY RUSSIAN MARKET INDICATORS
KEY RUSSIAN MARKET INDICATORS
*As estimated by Nikoliers
Source: Rosstat

KEY RESULTS

The development of domestic tourism continues. The tourist traffic is rapidly burgeoning, primarily due to domestic demand. The inbound tourist flows are gradually rebounding. While the CIS states are still leaders in total inbound tourist traffic, the share of Asian tourists keeps growing. The opening of new quality hotels is more active than a year earlier. Three new facilities were opened in Moscow, two in Saint Petersburg, and the room stock in the two cities has increased by 556 rooms.

Breakdown of inbound tourist flows in Russia, 2014-2024F

*As estimated by Nikoliers 

Source: Rosstat, Nikoliers

Governmental support of the industry

Governmental support of the industry

Governmental support of the industry

Governmental support of the industry

Governmental support of the industry

KEY INDICATORS OF MOSCOW AND ST. PETERSBURG MARKETS

KEY INDICATORS OF MOSCOW AND ST. PETERSBURG MARKETS

*The “quality hotels” and “quality room stock” concepts presuppose classic hotels managed by international and major national operators as well as certified hotels from three stars and from 15 rooms, which were earlier managed by international operators.

**The operational performance of hotels for 2021-2023 were reviewed on the basis of the data provided by Hotel Advisors. However, Nikoliers uses its own methodology of market data segmentation and pooling, which may cause discrepancies with the indicators published by Hotel Advisors independently or by other companies in alternative sources where the data of Hotel Advisors can be used.

Source: Nikoliers, Hotel Advisors

SUPPLY: Moscow

   280

The new room stock in Moscow for the first half-year of 2024  lags only 11% behind the number of rooms commissioned for the entire year 2023.

 rooms   


In the first half of 2024 three hotels were opened in Moscow: Cosmos Smart Semenovskaya 3* (115 rooms), DoubleTree Moscow Arbat 4* (100 rooms) and Stella Di Mosca 5* (65  rooms). All in all, five new facilities with the total room count of 732 must be rolled out to the Moscow hotel market in 2024. It is expected that in the second half of 2024 Glenver Garden 4* (234 rooms) and White Sea 4* (218 rooms) will open their doors for guests.

Since the middle of 2022, 29 hotels in the capital city have lost their international brands and had to change their signboards. To date, about five hotels with a total room stock of 1,633 keys are still operating under the old name. The de-branding process must be over in 2024 and there will be no more hotels operating under the brand of the departed operators.

Dynamics of quality supply commissioned in the Moscow market by categories

Dynamics of quality supply commissioned in the Moscow market by categories

Source: Nikoliers

The map of hotels to be opened in Moscow during 2024

The map of hotels to be opened in Moscow during 2024

SUPPLY: Saint Petersburg

  276

The new room stock commissioned in Saint Petersburg for H1 2024 exceeded by 40% the room stock commissioned for the entire year 2023.

rooms 


Supply of quality classic hotels in Saint Petersburg
Supply of quality classic hotels in Saint Petersburg
For the initial six months of 2024 two facilities were added to the room stock of the northern capital: the hotel part of DOMINA Pulkovo Hotel and Apartments and boutique hotel Cosmos Selection Italyanskaya. Three apart-hotels also opened their doors for guests, namely: Valo Soul 4*, IZZZI.Life VIBE 4*, and Port Comfort by Moika 3*.

No new quality hotels are expected to open in the second half of the year. Nevertheless, about 14 more apart-hotels with the total room capacity of 3,835 units have been announced to be opened till the end of the year. Interest in apart-hotels is growing due to the benefits for all participants: developers reduce their costs, investors get real estate with a low price of entry, operators earn on management, and tourists can save on accommodation.

 
Quality classic hotels and rated aparthotels opened for H1 2024

Format

Name

Star-rating    

Address

Room stock

Hotel

DOMINA Pulkovo Hotel and Apartments    

4*

14, bld. 7 Pulkovskoye sh.

253

Hotel

Cosmos Selection

Italyanskaya

5*

8А, Italyanskaya str.

23

Aparthote    l

Valo Soul

4*

61, Salova str.

448

Aparthotel

IZZZI.Life VIBE

4*

62, Seventh line of Vasilievsky Island    

61

Aparthotel

Port Comfort by Moika

3*

4, bld. 2 Grivtsova str.

42


Source: Nikoliers

DEMAND AND PRICING POLICY: Moscow

Based on the results for six months of 2024, we saw positive dynamics of all key market indicators. The median room rate for the current period amounted to 9,230 RUB/day, which  is 36.3% higher than a year earlier and 51.6% higher than in 2022. On average, the increase year-on-year did not vary much depending on the star-rating and was in the range of 34% to 38%.

The occupancy of the capital city’s hotels in the first half of 2024 stood at 73.6%, which is 5.6 p.p. higher than in 2023 for the same period. The highest occupancy rate was  demonstrated by three-star hotels – 78.3%, slightly less by four-star hotels – 74.7%, the occupancy of upper-upscale hotels was at the level of 68.1%.

Due to the ADR growth by one third, the revenue per room has increased 1.5 times. According to the results for the first half of 2024, RevPAR amounted to 6,638 RUB/day, with upper upscale hotels showing the greatest appreciation of this indicator compared to the last year +57.9% or up to 10,895 RUB/day. In the four-star category the growth amounted to 39.8% or up to 5,366 RUB/day, whereas in the three-star category prices grew by 47.7% or up to 3,915 RUB/day.

Dynamics of average daily rate (ADR), RUB/day

Dynamics of average daily rate (ADR), RUB/day

Hotel occupancy dynamics, %

Hotel occupancy dynamics %

Revenue per room (RevPAR) dynamics, RUB/day

Source: Hotel Advisors, Nikoliers

DEMAND AND PRICING POLICY: Saint Petersburg

According to the results for the first six months of 2024, the occupancy rate of St.  Petersburg hotels was 1.3 p.p. lower than during the same period last year, amounting to 60.3%. However, the average daily rate per room for the first six months of 2024 was 52.8% higher year-on-year and 79.8% higher than in 2022. The highest growth was demonstrated by five-star hotels, where ADR increased from 10,827 RUB/day in 2023 to 20,090 RUB/day in 2024 for the same period. The growth of this performance indicator for 3* and 4* hotels stood at 29% and 24%, respectively.

As a result, the revenue per room (RevPAR) showed positive dynamics. On average, this indicator increased 1.5 times to 4,632 RUB/day versus 3,051 RUB/day for the first half of 2023. The highest growth, despite a slight decrease in occupancy, was for the upper upscale hotels from 6,316 RUB/day to 11,869 RUB/day. For three and four star hotels the indicator  rose by 26-28%.

Dynamics of key indicators in the hotel market on average across all star-rating categories

*Starting in Q4 2022, the analysis of the operational performance of hotels and aparthotels has been based on the data of Hotel Advisors and the data of Nikoliers from its partners and clients. Within the framework of its sources Nikoliers  uses its own methodology of market data analysis, which may cause discrepancy with the indicators published by Hotel Advisors independently or by other companies in other sources, where they can tap into the data of Hotel Advisors.

Source: Nikoliers, Hotel Advisors

TOURIST FLOW: Moscow

  • The tourist flow of Moscow at the end of 2023 turned out to be record-high, amounting to 24.5 million guests. The capital received 2.5 million foreign tourists, but the majority of visitors, 22 million people, came from other regions of Russia. China is the leading non- CIS country by the number of tourists who increasingly prefer individual trips or business visits to organized group tours. Turkey, India and Iran are also among the leaders.
  • Based on the results for five months of 2024, the domestic tourist flow to the capital city exceeded by 18.2% the results for a similar period of 2023. There is also a trend towards a higher figure for the entire year 2024.
  • The demand for out-of-town tourism keeps burgeoning as well. With domestic travel getting increasingly popular, a trend for short trips to neighboring regions and auto- tourism is taking shape. More and more people are favoring such vacations by including working days too. This is fueled by the rising prevalence of hybrid and remote work, which was dominant during the pandemic. The peak of demand for this type of recreation in the Moscow region falls on the period from April to September.

Assessment of the domestic tourist flow to Moscow and its suburbs by the number of trips, 2023-5 months of 2024

Assessment of the domestic tourist flow to Moscow and its suburbs by the number of trips, 2023-5 months of 2024

TOURIST FLOW: Saint Petersburg

+20%   

Growth of the tourist flow to Saint Petersburg in the first half of 2024 year-on-year


During the initial six months of this year, 4.95 million people visited St. Petersburg. The  largest increase in tourist flows is associated with event and business tourism, given that the city hosted major events, such as SPIEF, Scarlet Sails, and others. Passenger traffic at Pulkovo International Airport of St. Petersburg in the first half of 2024 amounted to 9.6  million people, up 4% year-on-year. That said, domestic flights accounted for 7.8 million travelers, while international flights – for only 1.8 million flyers. According to the forecasts of the St. Petersburg Tourism Development Committee, the tourist flow in the northern capital at the end of 2024 may reach the mark of 10.3 million people or the level of 2019.

Tourist flow to Saint Petersburg
Tourist flow to Saint Petersburg
Source: Saint Petersburg Tourism Development Committee, Turbometer of Saint Petersburg

TRENDS AND FORECAST

  • The development of domestic tourism continues. Based on the results for 2023, the number of guests who stayed in collective accommodation facilities amounted to more than 77 million people, which is 19.4% more than a year earlier. As estimated by the Ministry of Economic Development, by the end of 2024, the number of guests staying in collective accommodation facilities can be at the level of 80 million people.§Reinvigoration of inbound tourist flow. Inbound tourism is forecast to increase this year,  driven by the launch of the e-visa system in August last year, an increase in the number  of new international flights and the weakening of the ruble versus major world currencies. At the end of 2023, 15.5 million foreign tourists visited Russia, which is 18.6% more than  a year earlier and almost a third more than in 2021. As estimated by tourist operators and travel agents, the figure may double at the end of 2024.
  • Focus on Asian tourists. Over the year, the share of Asian tourists in the inbound tourist flow has increased by 6.1 p.p. to 20.2%. Due to the introduction of Muslim Friendly and China Friendly standards, the stay of tourists from Asian countries and Gulf states will  become more comfortable, which will contribute to shaping the image of an attractive tourist destination.
  • As per certain amendments to the draft law on tax changes, the Russian Ministry of Finance proposed to replace the resort fee with a tourist tax starting in 2025. Municipalities will be able to increase the tax rate annually until 2029 – from 1% in 2025 to 5% by 2029. This could make life easier for tourists by eliminating the resort fee on check-in, but will also affect accommodation prices and tourism affordability. Unlike the current resort tax, which was used for specific projects, the tourist tax will go to the municipal budget and can be spent on any needs not necessarily related to tourism.

Oleg Germanenko , Head of Strategic Consulting Group in Moscow Strategic Consulting Department: "Indicators for the first half of 2024 suggest that the trend of the previous periods, specifically the burgeoning demand for hotel services, continues – primarily due to domestic tourism. There is also an obvious increase in inbound tourist traffic, with hoteliers focusing on tourists from Asia and the Gulf states. Growing demand improves the revenue performance of hotels as the price per average room, RevPAR, is rising. By the end of 2024, the demand for hotel  services is expected to grow further. This is largely facilitated by the opening of new modern  accommodation facilities both in cities with million-plus population and in resort regions which are not yet saturated with such facilities. In the midst of the key interest rate growth on the one hand, and government support measures aimed at the development of tourism in the country (possibility to receive preferential financing, subsidies, tax preferences) on the other hand, the hotel segment remains attractive for investors. Federal projects aimed at infrastructure development in Russia’s regions will also be a factor stimulating the development of the industry."

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