Социологический опрос с помощью видеоинтервью
Despite a 40% drop in prices, Moscow hotels are still not loaded. Hoteliers' revenue decreased by 60% or more. To survive, hoteliers are forced to look for new, unexpected solutions.
Despite the fact that the main restrictions related to the coronavirus were removed in Moscow at the beginning of summer, the business indicators of Moscow hotels are still far from the pre-crisis level. Hoteliers and market analysts interviewed by Forbes say this.
“If in April the average occupancy of the number of quality hotels in Moscow, according to STR Global, was 5%, then in July - early August it was already 30-35%,” says Marina Smirnova, head of the hotel business and tourism department at Cushman & Wakefield.
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The level of utilization is gradually increasing, says Olga Shirokova, director of the consulting and analytics department at Knight Frank. According to her, this indicator in April-May was within 10%, from June it began to grow and at the end of July reached about 40%, which is more than half of last year's values. According to the head of the department of hotel business at JLL Yana Ukhanova, in July in the hotels of the middle price segment ("3 stars") occupancy was 33% compared to 85% a year earlier. In the hotels of the luxury segment, occupancy in July did not exceed 15%.
Hoteliers give similar numbers. “In August, occupancy rates on some weekends exceed 65% and continue to grow. But, of course, they are significantly lower than those that we predicted based on the results of 2019, - says Maxim Brodovsky, general director of the Azimut Hotels chain. According to him, the average for Moscow hotels in July saw a drop in revenue by more than 60% compared to last year, and in August it will be about 50%.
In the luxury segment, the performance is no better.
“If we compare with the same period last year, in some business segments we see the figures are almost three times lower,” says Stanislav Kondov, general manager of Radisson Collection Hotel Moscow (manages the former hotel “Ukraine” in Moscow).
- The negative dynamics is primarily affected by the absence of foreign tourist groups and the ban on holding mass events, which also brought us a significant number of guests. From July to August, along with the partial lifting of restrictions, the business revived, and we increased the hotel occupancy rate from 30% to 40%, but this is much lower than what we are used to. The total turnover has decreased by more than 2 times. "
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The market is recovering slowly as the demand for hotel accommodation in Moscow is focused mainly on business tourists and foreigners, explains Olga Shirokova from Knight Frank. Now the number of such guests is growing weakly - there are still restrictions on entering the country and holding public events, including business ones.
According to experts interviewed by Forbes, the client of Moscow hotels this summer is distinguished by spontaneity. “Today our guests are individual travelers who come to Moscow for tourist or business visits. A certain number of rooms are occupied daily by so-called walk-ins guests who have not made a reservation. The average duration of visits is 2-3 nights, ”says Stanislav Kondov. “The booking window has changed a lot, guests make reservations on the same day or a day or two before arrival, and of course, they mostly choose only return rates,” Brodovsky notes. Business travelers and Russians who come to the capital as tourists, alone or with friends and family, have become guests of Moscow hotels this summer.
Discounts don't help
Due to falling demand, most hotels were forced to resort to significant price adjustments. “In June, price adjustments in Moscow hotels amounted to -34% in the middle segment and + 8-11% in the upper price segment compared to June last year,” says Marina Smirnova from Cushman & Wakefield. In July, these indicators compared to last year amounted to minus 25% and plus 5-8%, respectively.
“The lower the segment, the more significant the drop in the average tariff. Hotels of high segments prefer to keep the tariff, even increase it a little, ”says Tatiana Belova, director of the hospitality industry of the strategic consulting department of CBRE.
“We have kept the same rates as before,” says Stanislav Kondov of Radisson Collection Hotel Moscow. - Typically, due to the lack of business groups, the average rate (average price per room. - Forbes) is higher than usual: as you know, for business groups the rates are lower, and most of our current guests are individual guests. Unfortunately, due to the low load, this does not have a significant impact on the whole. "
Residential background: demand for Russian resorts exceeds 90%
According to Brodovsky from Azimut Hotels, the average cost of a room in Moscow hotels of the chain in July fell by more than 30% compared to last year, from 1 to 17
August, the average check fell by 20-22% year-on-year. “In the midst of the pandemic, prices fell by 50-60%, June-August by 30% compared to last year,” says Natalya Kuznetsova, co-founder of Icon Hostel in Moscow City. According to Yana Ukhanova from JLL, this June, compared to the previous year, the ADR (average rate) adjustment in Moscow hotels amounted to -41% in the middle price segment. In July, the picture remained practically unchanged - minus 30% compared to last year.
According to STR Global, the main demand this summer is for economical accommodation (46% in June), on average, an economy option without breakfast and without VAT costs 2,332 rubles (minus 27% compared to last year). “The greatest demand is for standard rooms, which is due to the absence of business trips - guests on business trips could afford to take an improved room category,” explains Maxim Brodovsky. “Now guests pay for themselves and try to save money, and suites are mostly relevant for families with children or large companies.”
“The results of the autumn season and the entire second half of the year will depend on the possibility of holding MICE events (Meetings, Incentives, Conferences, Events), the restoration of air traffic and the opening of borders,” says Tatiana Belova.
“In the autumn, the occupancy of hotels will directly depend on the recovery of business activity and demand for groups and events, and this in turn depends on the further lifting of restrictions imposed in Moscow, for example, on permission for mass events,” Brodovsky agrees.
Not enough help
From the very beginning of the crisis, the capital's authorities singled out hotels as one of the most affected industries.
Hospitality companies leasing land and non-residential properties near the city have been granted a deferral until the end of the year for rent payments for the second quarter and advance payments for the first quarter of 2020 for property tax and land tax.
In addition, landlords or owners of hotel premises received 50 percent reimbursement of property tax and land payments for the second quarter. “The list of measures that were developed for hotels included the payment of forced downtime of staff, and the abolition of the UST (Unified Social Tax. - Forbes) withholding, compensation for utility bills, and compensation for the credit rate,” explains Smirnova.
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According to the metropolitan authorities, as of August 14, 143 hoteliers have received assistance from the city for a total of 134 million rubles - this is a rental vacation for the period from March 1 to June 30 inclusive, said Vice Mayor of Moscow Vladimir Efimov.
“We received a tax deferral, which reduced the financial burden on hotels. A number of our hotels in Russia have received support for SMEs through disinfection subsidies. Also, for SMEs, a reduced rate of insurance premiums from wages has been introduced, that is, the tax burden has been somewhat reduced, and this reduction is valid even after July 1, ”says Brodovsky from Azimut Hotels.
However, not all market participants consider the assistance provided to be sufficient. According to Tatiana Belova, Director of the Hospitality Industry of the Strategic Consulting Department of CBRE, Tatiana Belova, at the beginning of the year, almost 1,500 hotel properties were registered in the capital with a total number of rooms of more than 85,000 rooms.
“Given the size of the market, the government support provided can hardly be called significant,” she said.
“State support was very limited. We were ready to issue a loan for six months only according to the number of employees, the amount is the minimum wage multiplied by the number of people, - says the co-owner of the Icon Hostel Natalia Kuznetsova. “He didn't even cover salary taxes. We did not have enough of this money, we were not interested, so we wanted to get a loan on a general basis (14-17% per annum). We applied to VTB, Alfa-Bank and Sberbank - and they refused us everywhere. "
Demand for resort housing has grown among Russians
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In the new environment, hoteliers are trying to discover new destinations in order to compensate for lost profits. “We started developing new business segments and opened a fully functional platform for online events,” says Stanislav Kondov. "Such a studio allows using augmented reality (AR) technologies to create a separate world of your event with special visual effects."
Yana Ukhanova from JLL says that in order to attract customers, hoteliers came up with the Hotel Office service, which provides for the use of a room as an office for the day. In particular, Ibis has such a service. “Guests can book rooms during the working day and use the hotel space for work. The Hotel Office service allows you to book an office for one day (from 9:00 to 18:00) or purchase a five-day package, ”Ukhanova says.