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Ekaterinburg Hotel Market Overview

JLL Hotels & Hospitality Group is glad to present the Ekaterinburg Hotel Intelligence report.
JLL Hotels & Hospitality Group is glad to present the Ekaterinburg Hotel Intelligence report.

November 12, 2014, 17:42 (PX Newswire)

Ekaterinburg is the 4th largest city in Russia with a population of approximately 1.4 million. It was a ‘closed city’ until 1991 but has become a key scientific, industrial and technical centre. It is one of the main hub cities in Russia in the heart of the Urals and will be a host city for the FIFA World Cup in 2018.

“Ekaterinburg was one of the first regional cities to develop a branded hotel market and is now host to 6 branded hotels (Hyatt Regency, Park Inn, Novotel, Ramada, and 2 from Vienna International at the airport).” - David Jenkins, Head of JLL Hotels & Hospitality Group, said. – “There has been some saturation within the hotel market with the Hyatt, Park Inn, Ramada and Novotel all opening within a few years of one another. We do though see long term opportunities here as long as World Cup fever does not drive unreasonable new supply.”

There are officially 69 hotels in the city with 4,474 rooms. As well as the 6 branded hotels (1,143 rooms) there are some quality local operations in the city from Marins Group and local operator USTA as well as various private hotels.

“Like most regional cities there is little tourism to speak of. There were 600,000 registered hotel guests in the city in 2013, a minor 3% growth over 2012. The bulk of demand is corporate domestic (85 to 90%) and sensitive to rate. As a host city for 2018 World Cup it is hoped they will be able to attract some more tourists going forward but we do not see anything major changing.” – David Jenkins commented.

According to David Jenkins, hotel performance has suffered due to the high supply and only gradual increase in demand. The Hyatt having 293 rooms has pressed rates down and the strong competition in the midscale between Park Inn, Novotel, Ramada and VI has also seen rate reductions. Today branded hotels occupancy is 55%, with ADR at RUB 4,000.

“There has been a lull in openings of hotels in the city since 2010, with investors having understood that the market had seen too many new entrants at one time. We are beginning to see interest once again though we do worry that lessons may not be learned and that the World Cup can drive investment interest well above and beyond the limited demand. The clever investment today would be into a city centre branded economy hotel.” – David Jenkins concluded.

Please find link to the report.

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