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​Kiev

Q1 2016 results in Kiev hotel market: occupancy rises along with hryvnia-denominated rates


​Kiev, 25 April 2016 – JLL analyses the quality hotels market results  in Kiev in Q1 2016.

Quality hotels’ operating results in January-March 2016 continued on their path to recovery. Despite the fact that traditionally Q1 is the "low" season for the market, this year the occupancy once again showed growth, –reaching 34% versus 30% in January-March 2015 and 26% in the same period of 2014.

"Business activity in the Ukrainian capital is gradually coming back; there are also changes in the structure of the tourism inflow which may have positive effect, – says Tatiana Veller, Head of Hotels & Hospitality Group, Russia & CIS. – The hotel market in the Ukrainian capital has started giving reasons for cautious optimism. We can now say that the market absorbed the increase in supply of early 2014 – Hilton Kiyv with 262 rooms, and at present the average market occupancy is experiencing positive dynamics. At the moment there are nine hotels managed by international brands with overall capacity of more than 2.1 thousand rooms, and, according to the information from hotel operators, at least three branded hotels with 750 additional rooms are to be opened by the end of 2017 – Ibis, Aloft and Park Inn.”

The average USD rate on Kiev market still suffers from the effects of hryvnia (UAH) weakening, but the price fall has slowed down. The average market-wide rate (ADR) in Q1 2016 decreased by 2.7% – and came down to USD146. For reference, in Q1 2015 it dropped by 20%.

"At the same time, the ADR position of hotels in local currency terms significantly strengthened over the past two years, – reports Tatiana Veller. – Compared to Q1 2014, the average rate in hryvnia increased by 124%, while growing by almost additional 20% YoY (compared to the same period of 2015). On average, one could expect to pay 3.8 thousand UAH per night to stay in quality hotels in Kiev this past quarter. The growth of the average rate in local currency is very important, because the entire structure of hotel expenses is traditionally calculated in UAH, the largest item of which – staff salaries – has not fluctuated much and remains more or less at the level of 2013-2014. "

Operating highlights of Kiev hotel market for Q1  2016
Operating highlights of Kiev hotel market for Q1  2016_27052016.png

Source: STR Global,  National Bank of Ukraine, JLL

Kiev operators and managers in most of the quality hotels under international and local brands have chosen to keep prices at a close to pre-crisis level, as the ability to attract more visitors by cheap accommodation is highly doubtful in current market conditions. "Today, the occupancy of Kiev hotels is not closely correlated with the prices, as the existing demand is concentrated mainly in the governmental, administrative, and international peacekeeping segments, which are less cost-sensitive, – comments Tatiana Veller. – The number of visitors to Kiev declined significantly over the past two years. However, we currently observe gradual recovery of some international demand – for example, from Turkey, some European countries, especially Eastern Europe, which thinks in terms of hard currency-denominated rates. Thus, we can expect increases in tourist inflow during the summer season. Prior to 2014, the warm season in Kiev always brought significant growth in occupancy and the average rate in the quality hotel market. "


About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56.4 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015, and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.​