Domestic tourism helped hotels increase their income by almost one and a half times
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The boom in domestic tourism helped Russian hotel operators increase the cost of accommodation by 24% over the three quarters of this year and increase the income received from each room by almost one and a half times. This is happening for the first time since pre-crisis 2019. But this is a nominal increase, hoteliers say: minus accumulated inflation, their revenue is still below what it was four years ago. The situation is constrained by the lack of solvent tourists from Western countries, although the incoming tourist flow has begun to recover slightly, but so far at the expense of guests from “friendly” countries.
Revenue per available room (RevPAR, revenue per available room) in Moscow hotels in January-September 2023 amounted to 5.9 thousand rubles, increasing by 46.2% year-on-year, CMWP calculated. Analysts call the indicator significant, since it is 13.3% higher than the value in January-September of the pre-crisis 2019. For example, at the end of three quarters of 2022, RevPAR was 23% lower compared to the same period in 2019.
The increase in profitability of hoteliers can be seen in other cities. Thus, according to CMWP, in St. Petersburg the figure for three quarters increased by 50.3% year-on-year, to 4.4 thousand rubles. per room, in Sochi – by 25%, up to 10 thousand rubles.
According to Rosstat, the total income of collective accommodation facilities in Russia in January-September of this year reached 644.6 billion rubles, which is an increase of 22.2% year on year. More pronounced dynamics in Moscow – growth by 64%, to 86.5 billion rubles. In St. Petersburg, the increase was 30%, to 45.9 billion rubles. Deputy director of the hospitality industry division of CORE.XP Dmitry Parinos says that in Moscow three- and four-star hotels, RevPAR increased by 33% year-on-year, in the five-star segment by 28%.
The growth in profitability is facilitated by an increase in the number of guests and the cost of accommodation. In Moscow, according to CMWP, the average annual occupancy in the hotel market as a whole for nine months was 72.9%, which is 11 percentage points higher year-on-year (p.p.). In luxury hotels, occupancy increased by 15.8 p.p., to 51.8%, in hotels in the budget segment – by 7.4–8.3 p.p., to 76.6–77.9%. The average cost of accommodation in Moscow, according to CMWP, in January-September 2023 increased by 24% year-on-year, to 8.1 thousand rubles. per night. Thus, in budget hotels a night’s stay will cost 3.4 thousand rubles, which is 33.1% more than a year ago, but in luxury hotels the rate decreased by 2%, to 20.7 thousand rubles.
CMWP partner Marina Usenko says the hotel market is now maintaining ties with “friendly” countries, noting the recovery of business tourism from Southeast Asia and the Middle East. According to the FSB Border Service, 11.8 million foreigners entered Russia in January-September this year – this is 1.5 million more year-on-year, but 14 million less than in the same period in 2019. The flow of foreign guests in hotels is mainly formed by citizens of China, India, Syria and the post-Soviet space, Azimut Hotels notes. Mr. Parinos says that tourists from China and the Middle East make up no more than 5% of guests in Moscow hotels.
Cosmos Hotel Group notes RevPAR growth of 45% year-on-year and 60% by 2019. The network attributes the positive dynamics to the zeroing out of VAT on hotel services, the growth of the domestic tourism market, and high corporate demand. Alexis Delaroff, regional director of Accor in Russia, Georgia and the CIS, notes that RevPAR in the facilities of his network is higher than both 2022 and 2019 levels. But, according to him, rising inflation does not allow the real profitability of objects to be restored.
Deputy Chairman of the Union of Tourism and Hospitality Roman Yeremyan also draws attention to this. He points out that, minus the accumulated inflation, the average RevPAR in Russia for the nine months of this year showed not an increase, but a decrease of 10% compared to the same period in 2019. According to expert estimates, in Moscow the decrease was 38%, in St. Petersburg – 24%. Mr. Yeremyan notes that before the pandemic, a significant share of the income of hoteliers in large cities of the country was formed by solvent tourists from Europe, of whom there are practically no now – this affects the decline in real indicators.
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