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Hotel Sector Market Overview: Results of the 1st half of 2017

The hotel sector in Saint Petersburg saw an increase in the number of commissioned rooms in the first half of 2017, with 460 quality hotel rooms added to the market. The offer structure remained stable, with the majority of rooms belonging to the 4-star segment. Despite the Confederation Cup and other events, tourist flow remained consistent. Average occupancy rate was 72% in the first half of the year, with an expected peak in 2018 due to the Football World Cup. Room tariffs saw an increase in average daily rate.

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Hotel Sector Market Overview: Results of the 1st half of 2017

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  1. HOTELSECTOR Market overview _ RESULTS of the 1st half of 2017

  2. HOTELSECTOR The offer Dynamics of the new commissioned rooms • By the end of the 1st half of 2017, total number of rooms in the quality hotels in Saint-Petersburg reached the amount of 18.1 thousand rooms. • In march 2017 Hilton Saint-Petersburg ExpoForum with 169 room volume was commissioned. • By July 207 2 hotels received commissioning permission: hotel Kostas (137 rooms) on ProfessrIvashentsov street, 2 and hotel Lotte (154 rooms) on Antonenko lane, which had a testing run in July 2017. • Thus, by the end of the 1st half of 2017, 460 quality hotel rooms were commissioned to the market • According to the results of the 1st half of 2017 the offer structure had not been changed significantly. The maximum share of the quality offers total capacity belongs to the 4* hotel segment – 52%; 17% and 31% belongs to 5* and 3* respectively. Offer structure according to the hotel class Perspective offer • Since the end of 2016 there were no significant changes in the developers’ plans. According to preliminary terms, it is expected that in total, by the end of 2018, 1,7 – 1,8 rooms would be commissioned • Taking into account Confederation Cup period, we expect that most of the announced projects will be launched on time. Key hotel projects, commissioned in the 1st half of 2017

  3. HOTELSECTOR Demand Dynamics of occupancy rate of St.Petersburg hotels • According to the results of the 1st half of 2017, tourist flow to Saint Petersburg remained on the same level as it was in 2016. • By the beginning of high season there was a decrease in the total guests' number. Nevertheless, Confederation Cup 2017, which attracted around 300 000 guests, slightly improved the situation. • By the end of 2017, the tourist flow is not expected to rise due to decreasing number of Russian tourists. Occupancy rate • According to the results of the 1st half of 2017, the average occupancy rate in Saint-Petersburg was 72%. For comparison, in the similar period of 2016 it was 74%. • By the end of 2017 annual average occupancy rate is expected to be 67-6%, i.e. the same as last year. A serious peak will be observed in 2018 because of the Football World Cup. Room tariffs dynamics Financial terms • From the beginning of 2017 ADR indicator (average daily rate per room) has increased on average by 8.5% and became accounted for 7 500 rubles. • For the 5* hotels the average rate in the 1st half of 2017 was 12 300 rubles, which is 8% higher than last year.. • For the 4* hotels ADR indicator increased by 5% and reached the level of 7 300 rubles. • The smallest increase in the average rate was recorded in the segment of 3* hotels and accounted for 5%. By the moment of this research, the rate for this category is 3 900 rubles.

  4. HOTELSECTOR Trends and forecasts • Despite of the Confederation Cup and SPIEF, the level of tourist flow to Saint-Petersburg by the end of the 1st half of 2017 remained on the same level. It can be primarily explained by the decreasing number of domestic tourists, who tend to prefer foreign destinations. • In 2017 the results of the hotel market main indicators are expected to be similar to the results in 2016. Qualitative growth of tourist flow and occupancy will be observed in 2018.

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