The growth of domestic tourist flow and active public discussion of this topic contribute to the interest of entrepreneurs in opening hotels. Over the year, the demand for renting premises for hotels increased by more than 40%, and for the development of business plans for projects - by 35%. The growth driver is small formats that require relatively modest investments. There are many enthusiasts among the new players, but the average profitability of a hotel room in Russia cannot yet return to the 2019 level, market participants warn.
Demand for rental real estate for hotels increased by 41% over the year in November, according to Avito Real Estate. The volume of proposals for such objects increased by only 5%. There is no such wave of demand in adjacent segments of commercial real estate. Commonwealth Partnership (CMWP) partner Marina Smirnova says the number of requests for business plans in the hotel and tourism sector has increased by 35% over the year. Regional Director of the NF Group Consulting and Analytics Department Olga Shirokova notes growing activity in all segments of the hotel business, including due to non-core investors.
Managing partner of Ivashkevich Hospitality Stanislav Ivashkevich says that renting rather than purchasing premises for opening hotels is a common practice. Marina Smirnova notes that 400 square meters is enough to open a hostel. m, and for a hotel with 50 rooms you will need 1.3–1.5 thousand sq. m. m. According to her, it is important to have a separate entrance and comply with fire safety requirements, and short lease agreements are unacceptable, since the hotel can only reach normal levels in two to three years. Mr. Ivashkevich clarifies that areas are usually rented for a period of five to ten years.
Interest in hotels in Avito Real Estate is associated with an increase in the number of tourist trips around the country, in particular in the winter season.
The head of the Ministry of Economy, Maxim Reshetnikov, predicted in mid-November that 30 million trips would be made in Russia this winter, 7% more than a year earlier. According to Rosstat, from January to October, 66.28 million people stayed in Russian hotels, which is 19.1% more than a year earlier. In Moscow, the figure increased by 14%, to 9.2 million, in St. Petersburg - by 30%, to 4.3 million. And in Crimea and the Krasnodar Territory, the number of guests in hotels during this period decreased by 1.7% and 14 .8% - up to 1.9 million and 7.6 million, respectively. According to Avito Real Estate, the Krasnodar Territory has become the leader in the dynamics of demand for rental hotel real estate.
Stanislav Ivashkevich believes that small hotels that do not require significant investment are opening most actively now. According to him, in popular locations or near large hotel clusters, such facilities can count on 100 percent occupancy, which is facilitated by a shortage of accommodation in some regions. Marina Smirnova also talks about the active development of small formats that can be launched quickly.
“To bring a hotel with 100 rooms or more to the market, it takes three to five years; up to 50 rooms, six months is enough,” notes Ms. Smirnova.
At the same time, correctly calculating the choice of location is not so easy. “For example, the Putorana plateau is an interesting object for tourists, but for investors it is a risky investment: the season is short, and autonomous life support from generators will eat up the lion’s share of revenue,” says Marina Smirnova. The profitability of hotel projects, in her opinion, today can vary in the range of 7–20%. Regional director of the Nikoliers strategic consulting department, Vladislav Nikolaev, speaks about the potential of recreational hotels due to a significant increase in the cost of accommodation.
Although the deputy chairman of the Union of Tourism and Hospitality, Roman Yeremyan, believes that activity in the creation of small budget hotels is now supported by enthusiasts from other areas, not all projects will be successful. “A similar boom was already observed before the 2018 FIFA World Cup, then they actively tried to sell all these properties,” he recalls. According to him, the average profitability per room of collective accommodation facilities in Russia at the end of the third quarter, taking into account the deflator, was 10% lower than in 2019.