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According to the research of the British corporate consultant company Deloitte, the occupancy rate of Moscow hotels takes the second place among all major European cities. Their occupancy reached 72,4% in the year 2005. Only Istanbul leaves Moscow a little behind. The reason of the recent success of Istanbul hotels, reaching 74,4% of their overall occupancy, was the increasing popularity of the city as a choice to host a large number of international organizations. The third place is held by Tel-Aviv with 68% occupancy.
At the same time there seems to be no end in sight in the growth of average room rates in Moscow. The Deloitte research shows that there has been a 4.5% increase in income per room throughout Europe in general, lead by Moscow hotels at 136 Euros per room, with Istanbul following with 86 Euros increase in income per room.
Supply in Moscow can be divided into two groups, Western and Soviet-style hotels. Soviet-style hotels may not appeal to all travellers, though their price tag is somewhat less than Western-style properties. Western-style hotels represent the upper-tier of the market and include some of the big names on the circuit including Radisson SAS Hotels and Resorts, Starwood Hotels and Resorts, Marriott International and Hyatt International. Although this section of the market is close to saturation, it has not stopped operators from continuing to enter the market.
In March 2005, the Holiday Inn Lesnaya opened its doors and became the second Holiday Inn hotel in Moscow. Located near the Belorussky Station in central Moscow, the 301-room Holiday Inn Lesnaya is the largest hotel to open since the 386-room Marriott Grand arrived almost a decade ago.
While the construction of the four and five-star hotels continues, the lack of mid-market and economy hotel supply across Russia to meet the needs of the money conscious travelers remains. However, as yet there does not seem to be any plans for mid-market brands to enter either Moscow or St Petersburg. Given the lack of choice, it is no wonder average room rates have increased so considerably in recent years.
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