JLL presents the Q1 2018 Kiev hotel market operational results market in a new format; JLL is now splitting up the market into hotels of Upper and Middle segments. Additionally, Middle segment hotels are included in the analysis for the first time.
“Operational results of the Ukrainian hotel market are gradually recovering. Even judging by an example of Q1, which is traditionally slow, the dynamic is visible: average market-wide occupancy in the period from January to March increased by 4 ppt vs. last year, to 43%, against the background of an increasing rate,” says Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS.
The average rate in dollars (ADR) in the Upper segments grew by 8 percent vs. Q1 last year, to USD160. In the Middle segments, the rate increased by 18 percent, to USD68. At the same time, occupancy of more expensive hotels remained at last year’s level (40 percent), while more budget-friendly accommodation facilities sold 3 ppt more rooms (and reached 50 percent).
“While the country is experiencing gradual economic recovery and returning political stability, Kiev as a capital city attracts more of both domestic and foreign demand, which stimulates ADR growth both in USD and Hryvnia,” comments Tatiana Veller. “In the Upper segments hotels, the average rate increased in Q1 by 6 percent, to UAH9,000; this led to a 5 percent increase in RevPAR. The more budget-friendly market players managed to gain 15 percent on their average rates, growing to UAH3,900; as a result the revenue margin per room in these hotels increased by 23 percent.
“Second quarter promises to be very successful for the Kiev hotel market: The Champions League final in May, as well as a large number of cultural and business events in the spring should support further growth of all operational indices of hotels in the Ukrainian capital,” adds Tatiana Veller. “There were already two branded hotels ibis Kiev Central Station (280 rooms) and Aloft Kiev (312 rooms) put into operation since the beginning of the year. A significant for this market rooms stock increase is likely to temporarily affect the occupancy in the Middle segments, but we expect them to recover quickly, considering the steady trend towards demand growth.”