Tourists drove a strong performance in Moscow hotels in summer 2013. Luxury hotels in particular capitalized from leisure visitors. Analysts say the numbers show how much the sector will benefit if the government follows up the Sochi Olympics with visa reform, deregulation of the airline industry and effective promotion of tourism.
Average occupancy from June to August for upscale hotels was 77 percent, according to figures from Jones Lang LaSalle. Excluding those months, occupancy for the rest of the year was 70 percent.
"People say there is no tourism but clearly there is," said Head of Hotels & Hospitality, Russia & CIS at Jones Lang LaSalle, David Jenkins. "If you look at the occupancy of these hotels in the summer they do really well," Occupancy exceeded 80 percent in October in upscale hotels, matching August.
The Federal Agency for Tourism suggests there were 2.6 million inbound leisure tourists last year, compared with 15.3 million outbound tourists. There were 6.2 million inbound business trips and 1.2 million outbound (see table page 3).
A busy calendar of events such as the International Amateur Athletics Federation games in August helped the Moscow market recover from a poor start to the year. However, hotel industry revenues for the whole year are likely to be lower than in 2012. Moscow hotels earn more than two-thirds of their income from corporate travelers. While the average daily rate in the upscale segment was 5,800 rubles over the summer period, it is 1,000 rubles higher over the rest of the year, Jenkins said.
On the visa regime, the industry holds out little hope of the Russian government doing more than a temporary lifting of the barriers to entry before the Sochi games. Other countries which compete with Russia for tourists are more nimble, said Scott Antel, Partner and Head of Hospitality, Russia, the CIS and Turkey, DLA Piper. "The Turks saw a market in people who need visas. They put a visa at the airport: it's called a tourist tax. They don't check you for anything except do you have $20. Dubai did the same thing, building a castle out of sand."
Antel said the industry needs a national tourism agency that is governed and run by the participants: the hotels, airlines and tour bodies. "There is a government body that decides what to do and they don't know what the industry needs," he said.
In order to build on the publicity that Sochi and Rosa Khutor will generate, the government must deregulate the airline industry, said Richard Tibbott, Chairman Advisory Services, Cushman & Wakefield. "The airport capacity is there. They will have to chase airline partners and the aviation authorities need to allow budget airlines in. That in the 1990s gave all the cities in central Europe their 10 percent compounded group in tourism: Prague, Riga and Tallinn."
Contact the author at m.gay@imedia.ru
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.