International Hotel Chains in Russia — 2018
1 | International Hotel Chains in Russia – 2018
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Number of hotels
International hotel chains in RussiaAccording to EY’s annual market research on the presence of international hotel brands in Russia, there were 179 hotels under international management operating in the region in October 2017 with a total room stock of 38,705 keys.
Moreover, nine new branded hotels (1,575 rooms) were opened in January - October 2017, compared with 13 hotels with a total room stock of 2,458 keys commissioned in Russia in 2016.
More than half of the existing room supply is concentrated in Moscow and St. Petersburg (52%), followed by Sochi (11%), the Moscow Region (6%), Ekaterinburg (3%), and other locations.
It is planned that by 2022 the number of hotels under international management will increase by 102 new properties (20,249 rooms). Thus, if by 2022 all announced hotels open, the number of hotels under international management in Russia will reach 281 (58,954 rooms), located in 59 cities.
In this case, by 2022 the share of Moscow and St. Petersburg will decrease by 5% (to 47%), while the share of Sochi will decline to 8%, due to the growth of branded hotel supply in the Moscow Region (7%) and Nizhny Novgorod (3%).
Moreover, openings of the first ever branded hotels are planned in 22 new locations, including Khabarovsk, Novorossiysk, Ryazan, Saransk, Stavropol, Tomsk, Vladimir, Vladivostok, and others.
Sources: hotel operators’ data, EY analysis
New hotels opened under international brands, per year (October 2017)
2International Hotel Chains in Russia – 2018 |
Hotels under international brands are currently located in 37 cities of Russia. By 2022 their presence is planned to grow to 59 cities.
International-scale events are often a key driver of the expanding footprint of international hotel operators. The biggest upcoming event is the 2018 FIFA World Cup, which will be held in Russia in 11 cities:
• Ekaterinburg
• �Kaliningrad
• �Kazan
• Moscow
• Nizhny Novgorod
• Rostov-on-Don
• Samara
• Saransk
• Sochi
• St. Petersburg
• Volgograd
As of October 2017 10 of the 11 host cities already had 123 hotels under international brands (28,394 rooms). By 2018, 20 new properties are planned to open (5,027 rooms).
The graph below shows the presence of international hotel chains in Russia as of October 2017.
Sources: hotel operators’ data, EY analysis Sources: hotel operators’ data, EY analysis
Share of existing room supply by cities in Russia(October 2017)
Share of future room supply by cities in Russia(including existing room supply)
30%
22%11%
6%3%
28%
Moscow St. Petersburg Sochi
Moscow region Ekaterinburg Other cities
29%
18%8%
7%3%
35%
Moscow St. Petersburg Sochi
Moscow region Nizhny Novgorod Other cities
3 | International Hotel Chains in Russia – 2018
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1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
Carlson Rezidor Hotel Group Accor Hotels InterContinental Hotels Group
Marriott International Hilton Worldwide Best Western
Sokos Hotels Kempinski Hotels Hyatt Hotels Corporation
Wyndham Hotel Group Louvre Hotels Group Rixos
Corinthia Hotels Rocco Forte Hotels Four Seasons Hotels & Resorts
Vienna House Domina Hotels
Lotte Hotels & Resorts
Belmond
Capella Hotel Group
Mamaison Hotels & Residences
Existing room supply under international management by city of Russia (October 2017)
Sources: hotel operators’ data, EY analysis
4International Hotel Chains in Russia – 2018 |
International hotel operators’ footprint in Russia by 2022
Sources: hotel operators’ data, EY analysis
SaranskRyazan
Kaluga
Astrakhan
KrasnodarKislovodsk
Stavropol
Mineralnye Vody
Novorossiysk
Sochi
Chelyabinsk
KrasnoyarskNovosibirsk Kemerovo
TomskOmsk
EkaterinburgNizhny Tagil
Tyumen
KazanKirovCheboksary
Ulyanovsk
SamaraTolyatti
LipetskVoronezh
VolgogradRostov-on-DonSevastopol
Yalta
Gelendzhik
IzhevskPerm
YaroslavlVladimir
ZavidovoVeliky Novgorod
Nizhny NovgorodIvanovo
Murmansk
Irkutsk
Vladivostok
KhabarovskBlagoveshchensk
KaliningradSvetlogorsk
Moscow
St.Petersburg
Ufa
Novokuznetsk
Zelenogradsk
Arkhangelsk
Orenburg
Elabuga
Zheleznovodsk
Kogalym
Surgut
The total branded room stock available in Russia as of October 2017 (i.e. 179 hotels with 38,705 keys in 38 locations) is operated or franchised by 22 international hotel chains currently present in the region.
The largest market share (80%) is divided between five chains: Accor Hotels, Hilton Worldwide, Marriott International, Carlson Rezidor Hotel Group, InterContinental Hotels Group.
The graphs below show the actual and projected footprint of hotel operators in Russia as of October 2017 and including future projects till 2022.
Sources: hotel operators’ data, EY analysis Sources: hotel operators’ data, EY analysis
Share of hotel operators – distribution of existing room supply (October 2017)
Share of hotel operators – distribution of future room supply (including existing rooms)
25%
19%
13%
12%
11%
20%
Carlson Rezidor Hotel GroupAccor Hotels
Marriott International
InterContinental HotelsGroupHilton Worldwide
Other operators
17%
21%
14%14%
15%
19%
Carlson Rezidor Hotel GroupAccor Hotels
Marriott International
InterContinental HotelsGroupHilton Worldwide
Other operators
37
5 | International Hotel Chains in Russia – 2018
Sources: hotel operator’s data, EY analysis
Russian hotel operators in the domestic and international markets (October 2017)
Chain Number of hotels in Russia / abroad Regions / cities in Russia Countries abroad
GOST Hotel Management 26 / 2 Moscow, Moscow region, Sochi, Nizhny Novgorod, Nizhny Novgorod region, Irkutsk, Irkutsk region, Kislovodsk, Khakasia, Abakan, Buryatiya
Ukraine, Austria
Amaks Hotels & Resorts 19 / 4 Vladimir, Belgorod, Rostov-on-Don, Ryazan, Azov, Omsk, Veliky Novgorod, Voronezh, Tambov, Novy Urengoy, Perm, Kazan, Krasnoyarsk, Ufa, Izhevsk, Tolyatti, Yoshkar-Ola, Kurgan, Valday
Belarus
Azimut Hotels 18 / 8 Moscow, St. Petersburg, Sochi, Yakutsk, Vladivostok, Voronezh, Astrakhan, Murmansk, Ufa, Novosibirsk, Nizhny Novgorod, Kostroma
Germany, Austria
Cronwell Hotels & Resorts 11 / 3 Moscow region, St. Petersburg, Khantymansiysk - Yugra
Greece
Heliopark Hotels & Resorts 7/ 1 Solnechnogorsk, Zvenigorod, Nebug, Penza, Suzdal, Malye Soli
Germany
Soyuz Marins Group 7 / - Yalta, Sochi, Ekaterinburg, Nizhny Novgorod, Rostov, Novosibirsk
-
Cosmos Group 5 / 3 Moscow, Moscow region, Petrozavodsk, Valday Czech Republic, Italy, Namibia
Alliance Hotel Management 5 / - Moscow, Obninsk, Saransk, Abakan, Tuapse -
Korston Hotels 3 / - Moscow, Ryazan, Serpukhov -
Total: 101 / 21
Russian hotel brands
Meanwhile, Russian hotel operators are increasing their presence in both Russia and abroad. National brands as a rule account for a significantly smaller proportion of hotels in the markets of most countries (except the U.S.) compared with hotels under international management. This is also true for the Russian market: currently, the share of hotels under international brands (179 hotels) is almost 1.5 times higher than the share of hotels under national management (101).
In October 2016 there were 169 hotels under international management in Russia vs. 72 hotels operated by Russian chains. Thus, this year the difference has decreased by 19 hotels in favor of Russian chains.
Russian operators continue to grow and are opening new hotels both on the domestic market and abroad. Major Russian hotel chains are listed in the table below:
6International Hotel Chains in Russia – 2018 |
Sources: hotel operators’ data, EY analysis
Sources: hotel operators’ data, EY analysis
Hotels opened under international management in Russia in January – October 2017
Chain Hotel Number of rooms City
Accor Hotels Ibis Irkutsk Center 128 Irkutsk
Ibis Budget Moscow Panfilovskaya 114 Moscow
Ibis Moscow Oktyabrskoe Pole 240 Moscow
Carlson Rezidor Hotel Group Park Inn by Radisson Izmaylovo Moscow 109 Moscow
Hilton Worldwide Hilton Garden Inn Moscow Krasnoselskaya 292 Moscow
Hilton St. Petersburg Expoforum 234 St. Petersburg
Hilton Garden Inn Volgograd 158 Volgograd
Lotte Hotels & Resorts Lotte Hotel St. Petersburg 150 St. Petersburg
Marriott International Courtyard by Marriott Nizhny Novgorod 150 Nizhny Novgorod
Total: 9 hotels 1,575 rooms 5 cities
Hotels under international management due to open in Russia by the end of 2017 (October 2017)
Chain Hotel Number of rooms City
Accor Hotels Ibis Domodedovo 158 Domodedovo, Moscow region
Carlson Rezidor Hotel Group Radisson Blu Hotel, Rostov-on-Don 81 Rostov-on-Don
Hilton Worldwide Hilton Garden Inn Novorossiysk 125 Novorossiysk
Hilton Garden Inn Orenburg 119 Orenburg
Hyatt Hotels Corporation Hyatt Regency Moscow Petrovsky Park 298 Moscow
InterContinental Hotels Group Holiday Inn Express Moscow - Dubininskaya 184 Moscow
Marriott International Sheraton Nizhny Novgorod Kremlin 176 Nizhny Novgorod
Sheraton Rostov-on-Don 307 Rostov-on-Don
Four Points by Sheraton Saransk 159 Saransk
Four Points by Sheraton Voronezh 108 Voronezh
Voronezh Marriott Hotel 220 Voronezh
Wyndham Hotel Group Ramada H&S Moscow Greenwood Park 376 Moscow
Days Hotel Zolotoe Koltso 150 Pereslavl-Zalessky
Ramada Resort Zolotoe Koltso 200 Pereslavl-Zalessky
Total: 14 hotels 2,720 rooms 9 cities
New hotels: 2017 – 2018
During the first ten months of 2017 the Russian hotel market increased by six new hotels opened under international brands.
According to information that EY has compiled from hotel operators and open sources, 14 more hotels are due to open by
the end of 2017. We believe, however, that the opening of some of them may be postponed until 2018.
7 | International Hotel Chains in Russia – 2018
Sources: hotel operators’ data, EY analysis
Key fi gures for international hotel operators in Russia(October 2017)
ChainExisting number of Future number of Total number by 2020
Hotels Rooms Hotels Rooms Hotels Rooms
Accor Hotels 39 7,311 30 5,069 69 12,380
Carlson Rezidor Hotel Group 35 9,607 3 621 38 10,228
Hilton Worldwide 24 4,301 26 4,340 50 8,641
Marriott International 23 5,278 16 3,319 39 8,597
InterContinental Hotels Group 18 4,561 12 3,816 30 8,377
Wyndham Hotel Group 5 752 6 1,198 11 1,950
Best Western 5 485 1 125 6 610
Sokos Hotels 3 927 - - 3 927
Kempinski Hotels 3 803 - - 3 803
Hyatt Hotels Corporation 3 700 5 1,213 8 1,913
Louvre Hotels Group 3 634 - - 3 634
Capella Hotel Group 3 220 - - 3 220
Rixos 2 536 - - 2 536
Rocco Forte Hotels 2 367 - - 2 367
Four Seasons Hotels and Resorts 2 357 - - 2 357
Vienna House 2 348 - - 2 348
Domina Hotels 2 327 4 668 6 995
Lotte Hotels & Resorts 2 454 1 192 3 646
Belmond 1 265 - - 1 265
Corinthia Hotels 1 388 - - 1 388
Mamaison Hotels & Residences 1 84 - - 1 84
Jumeirah Group - - 1 76 1 76
Total: 179 38,705 105 20,637 284 59,342
8International Hotel Chains in Russia – 2018 |
Source: hotel operators’ data, EY analysis
Sources: hotel operators’ data, EY analysis
Distribution of international operators by number of hotels
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Distribution of international operators by room supply
9 | International Hotel Chains in Russia – 2018
Hotel chain affiliations — key benefits
It is a prevailing opinion among hotel developers and owners – both domestic and international – that a global chain affiliation is an indispensable component of a hotel’s success. Without advocating either option and given the focus of this publication, below we share our thoughts on the key benefits that an owner may expect to gain from affiliation with a global hotel chain.
Source: EY analysis
Major benefits of affiliation with a global hotel chain
Benefit Comment
Recognition Recognizable hotel brand is perceived as a quality guarantee
Status of the property International brand raises the status of the property
Safety Foreign tourists prefer to stay in hotels with well-known international brands in “unsafe” countries
Global booking system Opportunity to book via various electronic channels, simplicity of search, booking without intermediaries
Integrated marketing Integrated marketing allows brand promotion costs to be reduced due to the hotel’s presence on the operator’s website, in booking systems, catalogs, and brochures
Loyalty programs Guests who join hotel chain loyalty programs are motivated to choose hotels in this chain due to various benefits and discounts for regular guests
Level of service Common service standards, management systems and staff training in hotel chains result in a higher level of service than in independent hotels
Stability in times of crisis Hotel chains are more resilient in times of crisis for a number of reasons: more stable demand from loyal guests, efficient occupancy management due to presence in several global reservation systems, the availability of highly skilled professionals with experience of working in unstable economic conditions
Lower costs Hotel chains guarantee lower costs on consumables, maintenance and repairs, advertising and marketing due to large purchase volumes and cost distribution among all hotels in the chain
Lower risk to investors International brand lowers risks and provides a great advantage when selling a property or obtaining a bank loan
Olga ArkhangelskayaPartner, Real Estate Advisory Services Leader in the CIS
Tel: +7 495 755 [email protected]
Anna LevinaManager, Hospitality & Leisure Advisory Services
Tel: +7 495 662 [email protected]
Angelika Normann
Senior manager, Hospitality & Leisure Advisory Services Leader in Russia
Tel: +7 495 648 [email protected]
Contact information
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