The key hotels in Moscow have so far this year performed well, in the main — showing a growth in RevPAR over 2011.
Last year, itself, was a strong year with the trend of 10% RevPAR growth over the city in comparison to 2010. Continued growth in 2012 was expected and so far the year has shown growth in all segments other than luxury, which is 4% below the same point in time last year. The drop in luxury is all coming from a drop in occupancy from almost 60% at this time last year to 56.5% this year. Luxury rate has slightly increased.
The upper-upscale hotels have shown a good growth in occupancy from 48% this time last year to 61% this year — with a similar rate. The new hotels added to the segment last year are beginning to produce. All this brings a healthy RevPAR growth of more than 25% for this segment (following a similar drop last year).
The upscale hotels have seen an impressive 14% RevPAR growth this year to date, coming mainly in occupancy. This can be a clear sign of luxury segment guests dropping down to quality hotels, but at a more affordable rate.
Upper-midscale hotels continue to impress with 2012 RevPAR growth so far of 12%, which is due to growth in both rate and occupancy.
The midscale segment is even more impressive with a 16% RevPAR increase year to date, stemming from a slight dip in occupancy but with decent rate growth.
All in all, the picture for the year is growth almost all around. The dip in the luxury segment is no surprise given the economics globally but overall the hotels are trading well. How this will run through the rest of the year is certainly open to debate.
The second quarter is usually the strongest quarter of the year for Moscow hotels and we need to see how June performs given the recent European market fluctuations. Still, with few new hotels coming into the market and continued interest in Moscow as a center of regional activity we are comfortable that there should be no immediate drop in performance. We do, though, think that the growth seen so far this year will slow down, but still showing a positive RevPAR increase in most segments over 2011.
Contributed by David Jenkins, partner, head of hospitality, Cushman & Wakefield, Russia and CIS, Moscow