“Five” with minus guests – Newspaper Kommersant No. 18 (7463) dated 02/01/2023

The most affected by the lack of foreign tourists in Russia in the hotel market were five-star hotels in Moscow. Now some of these properties are lowering prices in the hope of attracting corporate clients. But to rectify the situation, according to consultants, can only return wealthy tourists from China. They are already showing interest in traveling to Russia, but their flow will be limited due to the negative news background and the absence of the usual luxury stores.

The occupancy of five-star hotels in Moscow in 2022 decreased by 10.2 percentage points (p.p.), to 52.7%, Nikoliers told Kommersant. Vice-President of the Federation of Restaurateurs and Hoteliers of Russia Vadim Prasov also noticed a decrease in the occupancy of high-budget hotels in Moscow following the results of last year. Five-star hotels have the worst performance among all segments of the hotel market. For comparison: the occupancy of three-star hotels increased by 4.3 percentage points over the year, to 70.8%, while four-star hotels remained unchanged at 69%. Last year, the load on the whole market in Moscow amounted to 64.5%, which is 2.7 percentage points lower year-on-year, Nikoliers notes. In CORE.XP, they talk about a decrease in the average load in Moscow by 0.9 percentage points, to 63.4%.

Hotels in St. Petersburg, according to Nikoliers, were occupied by an average of 54%, up 3 percentage points yoy. The occupancy of five-star hotels turned out to be at 38%, which is 4 p.p. more. The St. Petersburg market was positively affected by the influx of domestic tourists, explains Veronika Lezhneva, Director of the Nikoliers Analytics Department. In Moscow, the reason for the decline in occupancy of expensive facilities was the lack of foreign tourists due to limited air traffic and the disconnection of the Russian Federation from international payment systems, the expert adds. Back in 2021, there were relatively many wealthy guests from the Middle East in Moscow, but last year their flow dried up, as expected, Vadim Prasov notes.

According to Kontur.Hotel, in 2022, 6.2% of foreigners stayed in Russian hotels: formally, this is 1.5 p.p. higher than a year earlier, but this was influenced by the tripling influx of guests from Ukraine. In 2019, foreign tourists accounted for 9.1% of all hotel guests.

Vadim Prasov says that some high-budget hotels have begun to reduce prices for corporate clients. The founder of Ivashkevich Hospitality, Stanislav Ivashkevich, notes that now, in principle, it is impossible to sell a room for more than 12-15 thousand rubles. per night, while for some objects the tariffs still reach 25-40 thousand rubles. per night.

According to the managing director of Aeroclub Yulia Lipatova, five-star hotels for business travelers are the only ones where the average cost of a night has not increased, while in three-star hotels it has increased by 22%. According to her, this has led to the fact that the number of business guests in expensive facilities has increased, while in three-star ones, on the contrary, it has decreased. According to Aeroclub, high-budget hotels were chosen by 28% of company clients who stayed in Moscow last year, which is 11 percentage points higher than in 2019.

Vadim Prasov expects that this year the situation will improve due to the return of Chinese tourists, whose flow was suspended due to the pandemic. Previously, a significant part of the guests from China stayed in high-budget hotels in Moscow, which may happen again in 2023, the expert believes. The representative of the tour operator “Intourist” Daria Domostroyeva calls the forecast for the inbound tourist flow for this year “moderately optimistic.” Now the company, according to her, has a lot of preliminary applications from groups and individual clients from China, but the situation will largely depend on the implementation of the visa-free entry mechanism and the flight program. The main stream from China is budget tourists choosing hotels of the two- or three-star category, Ms. Domostroyeva says. “But quite wealthy guests come from Taiwan and Hong Kong, staying in expensive hotels, there are also applications from them now,” the expert states. However, Stanislav Ivashkevich is confident that the influx of such guests this year will be limited: they are held back by the news background and the absence of some of the shops of the usual luxury retailers.

Alexandra Mertsalova