International Hotel Chains in Russia

Transcription

1 International Hotel Chains in Russia

2 International Hotel Chains in Russia 1 International hotel chains 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. Moreover, nine new branded hotels (1,661 rooms) were opened in January - October 2016, compared with 13 hotels with a total room stock of 2,271 keys commissioned in Russia in New hotels opened under international brands, per year (October 2016) More than half of the existing room supply is concentrated in Moscow and St. Petersburg (52%), followed by Sochi (11%), the Moscow Region (6%), Ekaterinburg (3%), and other locations. 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. In this case, by 2021 the share of Moscow and St. Petersburg will decrease by 3% (to 49%), while the share of Sochi will decline to 8%, due to the growth of branded hotel supply in the Moscow Region (7%) and Nizhny Novgorod (3%). Moreover, openings of the first ever branded hotels are planned in 16 new locations: Arkhangelsk, Kemerovo, Khabarovsk, Mineralnye Vody, Novorossiysk, Orenburg, Pereslavl-Zalessky, Ryazan, Saransk, Stavropol, Tolyatti, Tomsk, Vladimir, Vladivostok, Zelenogradsk, and Zheleznovodsk.

3 International Hotel Chains in Russia 2 Share of existing room supply by cities in Russia (October 2016) Share of future room supply by cities in Russia (including existing room supply) Hotels under international brands are currently located in 39 cities of Russia. By 2021 their presence is planned to grow to 55 cities. International-scale events are often a key driver of the expanding footprint of international hotel operators. The biggest upcoming event is the 2018 FIFA World Cup, which will be held in Russia in 11 cities: As at October of the 11 host cities already had 113 hotels under international brands (27,272 rooms). By 2018, 44 new properties are planned to open (10,035 rooms). The graph below shows the presence of international hotel chains in Russia as of October 2016: Ekaterinburg Kaliningrad Kazan Moscow Nizhny Novgorod Rostov-on-Don Samara Saransk Sochi St. Petersburg Volgograd

4 International Hotel Chains in Russia 3 Existing room supply under international management by city of Russia (October 2016)

5 International Hotel Chains in Russia 4 International hotel operators footprint in Russia by 2021 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 can be found on page 10). Share of hotel operators distribution of existing room supply (October 2016) The graphs below show the actual and projected footprint of hotel operators in Russia as of October Share of ofhotel operators distribution of of future room supply (including existing rooms) Source: hotel operator s data, EY analysis

6 International Hotel Chains in Russia 5 Russian hotel brands Meanwhile, Russian hotel operators are increasing their presence in both Russia and abroad. National brands as a rule account for a significantly smaller proportion of hotels in the markets of most countries (except the U.S.) compared with hotels under international management. This is also true for the Russian market: currently, the share of hotels under international brands (169 hotels) is almost 2.5 times higher than the share of hotels under national management (72). In October 2015 there were 152 hotels under international management in Russia vs. 73 hotels operated by Russian chains. Thus, in the past year the difference has grown by 18 hotels in favor of international chains. Nevertheless, Russian operators continue to grow and are opening new hotels both on the domestic market and abroad. Major Russian hotel chains are listed in the table below: Russian hotel operators in the domestic and international markets (October 2016) Hotel chain Number of hotels in Russia / abroad Cities of presence in Russia Countries of presence Azimut Hotels 18 / 8 Amaks Hotels & Resorts 20 / 4 Heliopark Hotels & Resorts 6/ 1 Intourist Hotel Group 5 / 3 Cronwell Hotels & Resorts 11 / 3 Moscow, St. Petersburg, Sochi, Vladivostok, Astrakhan, Voronezh, Kostroma, Nizhny Novgorod, Novosibirsk, Ufa, Murmansk Vladimir, Belgorod, Rostov-on-Don, Ryazan, Azov, Omsk, Veliky Novgorod, Voronezh, Tambov, Novy Urengoy, Perm, Kazan, Krasnoyarsk, Ufa, Izhevsk, Tolyatti, Yoshkar-Ola, Kurgan, Valday, Staraya Russa Moscow, Moscow Region, Nebug, Penza, Suzdal, Nizhnekamsk Moscow, Moscow Region, Petrozavodsk, Gorno-Altaysk St. Petersburg, Khanty-Mansiysk AO Yugra, Kaluga Region, Astrakhan Korston Hotels 3 / - Moscow, Kazan, Serpukhov - Alliance Hotel Management Soyuz Marins Group 5 / - Total: 72 / 19 4 / - Obninsk, Saransk, Abakan, Tuapse - Nizhny Novgorod, Sochi, Yalta, Ekaterinburg, Novosibirsk Germany, Austria Belarus Germany Czech Republic, Italy, Namibia Greece -

7 International Hotel Chains in Russia 6 New hotels: During the first ten months of 2016 the Russian hotel market saw nine new hotels opened under international brands. According to information that EY has compiled from hotel operators and open sources, nine more hotels are due to open by the end of We believe, however, that the opening of some of them may be postponed until Hotels opened under international management in Russia in January October 2016 Operator Hotel Number of rooms City Accor Hotels Best Western Ibis Krasnodar Center 220 Krasnodar Ibis Stupino 129 Stupino, Moscow Region Best Western Plus Centre Hotel, St. Petersburg 107 St. Petersburg Carlson Rezidor Hotel Group Radisson Residences, Zavidovo 200 Zavidovo Domina Hotels Domina Novosibirsk 218 Novosibirsk Hampton by Hilton Nizhny Novgorod 184 Nizhny Novgorod Hilton Worldwide Hampton by Hilton St. Petersburg Expoforum 207 St. Petersburg DoubleTree by Hilton Tyumen 195 Tyumen InterContinental Hotels Group Holiday Inn 201 Moscow Total: 9 hotels 1,661

8 International Hotel Chains in Russia 7 Hotels under international management due to open in Russia by the end of 2016 (October 2016) Operator Hotel Number of rooms City Accor Hotels Marriott International Wyndham Hotel Group Adagio Moscow Kievskaya 150 Ibis Moscow Kievskaya 300 Novotel Moscow Kievskaya 250 Moscow Marriott Krasnodar 262 Krasnodar Courtyard by Marriott Nizhny Novgorod Ramada H&S Moscow Greenwood Park Days Hotel Zolotoe Koltso 150 Ramada Resort Zolotoe Koltso Nizhny Novgorod 376 Moscow Pereslavl-Zalessky Ramada H&S Rostov-on-Don 92 Rostov-on-Don Total: 9 hotels 1,930

9 Key figures for international hotel operators in Russia (October 2016) International Hotel Chains in Russia 8 Operator Existing Future Total quantity by 2021 (existing + future) Hotels Rooms Hotels Rooms Hotels Rooms Carlson Rezidor Hotel Group 35 9, ,227 Accor Hotels 33 6, , ,568 InterContinental Hotels Group 18 4, , ,374 Marriott International 16 3, , ,880 Hilton Worldwide 21 3, , ,255 Best Western 6 1, ,576 Starwood Hotels & Resorts 7 1, , ,908 Sokos Hotels Kempinski Hotels Hyatt Hotels Corporation , ,913 Louvre Hotels Group Rixos Wyndham Hotel Group , ,811 Corinthia Hotels Rocco Forte Hotels Four Seasons Hotels and Resorts Vienna House Domina Hotels Lotte Hotels & Resorts Belmond Capella Hotel Group Mamaison Hotels & Residences Jumeirah Group Total: , , ,970

10 Distribution of international operators by number of hotels International Hotel Chains in Russia 9 Distribution of international operators by room supply

11 International Hotel Chains in Russia 10 Major mergers & acquisitions in 2016 Below material is based on the information of news agencies and other open sources. Accor Hotels and FRHI Hotels and Resorts Accor Hotels bought the FRHI Hotels and Resorts chain, which owned the Swissotel, Fairmont and Raffles brands. The transaction size is estimated at around $ 2.9b. The FRHI hotel chain has 171 hotels throughout the world, 27 of which are under construction. In Russia there are two Swissotel hotels currently (in Moscow and Sochi). Louvre Hotels Group and Nordic Hotels Louvre Hotels Group acquired Nordic Hotels chain, which is present in 11 cities of Germany. The exact deal size has not been disclosed. The existing Nordic hotels (more than 20) have been rebranded as Golden Tulip, Tulip Inn and Première Classe. All Nordic hotels are located in Germany with around 1,800 rooms in total. Marriott International and Starwood Hotels and Resorts Marriott International bought Starwood Hotels and Resorts, which owns 11 brands of various categories. The transaction size is $ 12.2b. The Starwood hotel chain owned nearly 1,800 hotels in more than 100 countries. Marriott International is currently integrating all Starwood brands into its portfolio. In Russia this includes seven existing hotels and a similar number of planned ones. Carlson Rezidor Hotel Group and Prizeotel Carlson Rezidor Hotel Group has announced its entry into the economy hotel segment by acquiring 49% of Prizeotel for 14.7m, with the right to buy the rest of the shares four years later. Prizeotel had three existing hotels in Germany with 555 rooms in total. Intourist and Regional Hotel Chain Sistema Hotel Management company (Intourist), which is part of JSFC Sistema, acquired Regional Hotel Chain (RHC) from Venture Investment and Yield Management. The deal size was RUB 6.6b, including RUB 4b of debt. RHC has nine hotels in Russia (1,379 rooms) under a franchise agreement with international hotel operators including Carlson Rezidor Hotel Group, InterContinental Hotels Groups, and Marriot International.

12 International Hotel Chains in Russia 11 Hotel chain affiliations key benefits It is a prevailing opinion among hotel developers and owners both domestic and international that a global chain affiliation is an indispensable component of a hotel s success. Without advocating either option and given the focus of this publication, below we share our thoughts on the key benefits that an owner may expect to gain from affiliation with a global hotel chain. Major benefits of affiliation with a global hotel chain Benefit Recognition Status of the property Safety Global booking system Integrated marketing Loyalty programs Level of service Stability in times of crisis Lower costs Lower risk to investors Comment Recognizable hotel brand is perceived as a quality guarantee International brand raises the status of the property Foreign tourists prefer to stay in hotels with well-known international brands in unsafe countries Opportunity to book via various electronic channels, simplicity of search, booking without intermediaries Integrated marketing allows brand promotion costs to be reduced due to the hotel s presence on the operator s website, in booking systems, catalogs, and brochures Guests who join hotel chain loyalty programs are motivated to choose hotels in this chain due to various benefits and discounts for regular guests Common service standards, management systems and staff training in hotel chains result in a higher level of service than in independent hotels Hotel chains are more resilient in times of crisis for a number of reasons: more stable demand from loyal guests, efficient occupancy management due to presence in several global reservation systems, the availability of highly skilled professionals with experience of working in unstable economic conditions Hotel chains guarantee lower costs on consumables, maintenance and repairs, advertising and marketing due to large purchase volumes and cost distribution among all hotels in the chain International brand lowers risks and provides a great advantage when selling a property or obtaining a bank loan Source: EY analysis

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