The hotel market in Russia, one of the most affected by coronavirus infection, will begin to recover no earlier than July - September 2020, follows from the report of the consulting company CBRE, available to RIA Real Estate.
MOSCOW, April 30 - RIA Real Estate. The hotel market in Russia, one of the most affected by coronavirus infection, will begin to recover no earlier than July - September 2020, follows from the report of the consulting company CBRE, available to RIA Real Estate.
“After the end of the self-isolation regime, the business segment will be the first to recover. However, we do not expect strong growth before the third quarter of 2020, ”the study says.
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At the same time, the consultants point out that to analyze the recovery period, one can focus on the Chinese and European scenarios.
“The Chinese hospitality market started to recover gradually after two months. In China, a rapid decrease in occupancy began in mid-January, in mid-February the market showed critical indicators, and recovery began in mid-March - occupancy in China's hotels is at the level of 20-30%. But the dynamics in the European hotel markets shows a stronger drop in profitability and a longer recovery period, ”the report says.
According to CBRE, in the first quarter of 2020, about 95% of hotels operated in Moscow, and in April, the supply on the capital market decreased by 40%.
“In fact, about 80% of the hotels on the market are in critical condition. Most of the operating hotels are preserving floors and parts of buildings, optimizing staffing, and cutting costs, ”the company says.
As indicated in the study, already in March, the occupancy of Moscow hotels decreased by an average of 50.6%, and the luxury segment suffered the most (minus 64%). In the second quarter, experts expect the utilization to drop to 5-10%.
“If at the beginning of 2020 hotel experts were assessing the damage due to the loss of Chinese tourists, then by the end of the first quarter it became clear that the blow that was caused by the COVID-19 pandemic and its consequences for the hotel business was the worst thing that happened to the hotel market. Russia and Moscow for the entire time of its existence. Market utilization in March for the first time amounted to 34%, the luxury segment showed 22%. As the hotel market in China has shown, this is far from the limit, ”Tatiana Belova, head of the hospitality industry department at CBRE, is quoted in the report.