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News Release

Kiev

Kiev Hotel Market Finished 2016 with RevPAR Growth in both UAH and USD


​​Kiev, 26 January, 2017 – JLL presents the 2016 results of the quality hotels market in Kiev*.

“In year 2016 there have been several positive developments in the macro-economic, political and social environment of Ukraine, that allowed the tourism in the country to experience positive dynamic,” – Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, says. – “The capital city is experiencing gradual recovery in terms of touristic flow, assisted by the continuing hryvnia fall against most hard currencies (of course not a good thing for economy in general). Kiev becomes a budget-friendly European travel option for most foreign tourists.”

“Based on the year-end results of 2016, we can finally proclaim that quality Kiev hotel market has suffered through its worst and began recovery. The occupancy rose second year in a row, to nearly 40% year-round against 34% in 2015 and 29% in 2014.” – Tatiana Veller notes.

There has been robust ADR growth in hryvnia (by 14%, to 3,800 UAH) on a year-on-year basis. This means a 128% (over two times!) cumulative increase in price for a night stay at a hotel in local currency vs. the last stable year in Ukrainian capital, 2013 (then it was just slightly below 1,700 UAH). This hike in ADR also allowed revenues per room to grow by 34%, to 1,500 UAH compared to 2015.

Kiev Quality Hotel Market Results in Local Currency (YTD Year-on-Year) vs. UAH-USD Exchange Rate
Kiev Quality Hotel Market Results in Local Currency (YTD Year-on-Year) vs. UAH-USD Exchange Rate_26012017.png

Source: STR Global, JLL, National Bank of Ukraine

USD ADR drop slowed nearly to a stop (only a 3% loss this year, to USD 150), and the USD RevPAR recovered healthily, rising 14.6% to USD 60 per room.

Kiev Quality Hotel Market Results (YTD year-on-year), USD
Kiev Quality Hotel Market Results (YTD year-on-year), USD_26012017.png

Source: STR Global, JLL

There have been no additions, according to JLL sources, to the quality room stock in the city, however, there is a prediction for 2017 of a 192-room Park Inn opening on Troitskaya street. That is the first new hotel under international brand to open in the city since Hilton entry in early 2014. This shows that investors are starting to regain confidence in this market, albeit, reportedly, this is mainly local money at the moment.

As the market makes gradual progress to restoring its prior positions in operating indexes, hopefully the developers and financial institutions will soon regain confidence to unfreeze projects previously put on hold, and activate debt financing to further stimulate development.

“We see many reasons for the Kiev hoteliers and investors to be optimistic for 2017. First of all, there is a Eurovision song contest which will happen in the city in May. Additionally, the Group A games of Men's World Ice Hockey Championship 2017 will be held in the Ukrainian capital at the end of April. This means busy spring for Kiev hoteliers in the quality rooms stock, traditionally a choice for international travelers.” – Tatiana Veller comments. – “Looking slightly further ahead, the 2018 UEFA Champions League games will be held in Kiev in May next year. So, seems like the page has been turned, and it’s only up from here for the hospitality market of the main Ukrainian city.”

The stabilization of the economic situation in the country and the restoration of business activity will help to return demand from corporate individual travelers and MICE events. Additional effect in 2017 on the hotel industry both for Kiev and the entire country, will be simplification of the visa regime with China, which came into effect in the middle of 2016: these tourists travel cheaply, but in large groups, which allows hoteliers to increase revenues on the back of higher occupancies.


*All statistics on operational results are sourced from STR Global with segments based on JLL configurations.



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 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 70,000. 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 $59.7 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, 2006-2016 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, 2016, 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.​