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Q1 2016 Sochi hotel market results: Operating results show positive dynamics in mountain and coastal clusters

Moscow, 10 May, 2016 – JLL analyses the quality hotels market results  in Sochi mountain and coastal areas in Q1 2016.

Winter season 2016 was very successful for quality hotels in the mountain cluster: 7 out of 10 rooms were occupied in Krasnaya Polyana in Q1.

“YTD occupancy in the mountain cluster in Sochi increased by at least 10 p.p. for the second year in a row. In fact, this year the numbers started resembling alpine hotels’ occupancy figures, where the average occupancy on main resorts in high season sits around 80%.” –Tatiana Veller, Head of JLL Hotels & Hospitality Group, Russia & CIS, said. – “As for the average rate, this year showed a stunning record: market-wide ADR for Q1 reached approximately RUB8,700, and in January and February it was almost RUB10,000. Revenue per available room (RevPAR) increased by almost 54% compared to last year, and more than doubled compared to the figures of Olympic season-2014.”

Hotels in the coastal cluster in Q1 were also popular: in the first two months of 2016 occupancy of these properties increased by 8.7 p.p. compared with the previous year, reaching 41%, while in March it went up to  almost 50%. “This is an extremely positive result for seaside hotels in the traditionally low winter season,” - Tatiana Veller comments. – “The ADR figure for Q1 grew by over 1 thousand rubles compared with the previous year – up to RUB6,200, which in turn led to an unprecedented increase in RevPAR by almost 53%.”

“Due to macroeconomic factors and foreign policy changes Sochi has all chances to become an exemplary success in exception to the general rule of gloomy post-Olympic statistics – the cities hosting the Olympic Games, rarely experience tourist inflow increases for several years following the event,” - Tatiana Veller notes. – “This year so far quality hotels of the most popular Russian resort destination show a steady trend of growth in operating performance figures. If the planned in summer opening of the gambling zone in the “Gorky Gorod” complex happens, the mountain cluster hotels will be able to bridge the shoulder season and reach highly positive results for the whole year. Hotels in the coastal cluster also started this year with high expectations, and considering the steady growth in domestic tourism, we can hope this trend will remain.”