INBOUND TOURISM

According to the UN World Tourism Organization (UNWTO), in 2016, Russia entered the top ten most visited countries in the world, with the number of tourists exceeding 30 mln. The Federal Tourism Agency (Rosturizm) reports that today most tourists come to our country from Asia, with the number of visitors constantly growing. This applies to Korea, India, Iran, Vietnam, and other eastern countries, the leader among which is China, with a 15% increase in visitors in 2016.

Blackwood and Top Hotel Experts report that the Russian hospitality industry demonstrated unprecedented growth at year-end 2016. The results of the segment were due to an increase in tourist flows in the country: in 2016, the inbound and domestic tourist flows in Russia grew by 6% and 15%, respectively. Analysts came to such conclusions after having analyzed indicators of the Moscow and St. Petersburg hotel market.

ATOR data shows that since 2016 foreign tourists have been spending spend more money on trips to Russia. There was an 88% increase compared to 2015.

General indicators of the Russian tourism market

DOMESTIC TOURISM

In Russia, domestic tourism is rapidly and actively developing. 2016 for the first time the number of Russians who have spent their vacation inside the country exceeded the number of those who travelled abroad. According to the Federal Tourism Agency, the domestic tourist flow in Russia increased by more than 15%.

Features of the Russian quality hotel market

The demand for hotels that can provide high-quality services to their guests in Russia (not only for those located in large towns and cities, but also for country ones) is growing every year

SAINT PETERSBURG

The average weighted market occupancy is growing in H1 2016; compared to the same period of 2015 it increased by 2 p.p. and reached 59%. So, due to the strong growth of ADR in all segments, RevPAR had risen by a record 23%. The luxury segment had the most positive dynamics of operating performance in H1 2016: RevPAR increased by 31% because of a 5 p.p. occupancy growth aided by 25% hike in ADR.

ADR (Average Daily Rate) — average price (tariff) of occupied room (total rooms revenue divided by number of rooms sold in the past 24-hour period) 
Published rate — average cost of accommodation, published on hotel websites and online booking portals.
RevPAR (Revenue Per Available Room) — profitability per room (total guestroom revenue divided by total rooms available) 

International hotel brands in Russia

According to EY’s annual market research on the presence of international hotel brands in Russia, in October 2016 there were 169 hotels under international management operating in the region with a total room stock of 37,635 keys.

It is planned that by 2021 the number of hotels under international management will increase by 109 new properties (22,335 rooms). Thus, if by 2021 all announced hotels open, the number of hotels under international management in Russia will reach 278 (59,970 rooms), located in 55 cities.

The total branded room stock available in Russia as of October 2016 (i.e. 169 hotels with 37,635 keys in 39 locations) is operated or franchised by 23 international hotel chains currently present in the region. The largest market share (64%) is divided between the Carlson Rezidor Hotel Group, Accor Hotels, InterContinental Hotels Group and Marriott International (excluding Starwood Hotels & Resorts: information about mergers & acquisitions).