On March 16, within the framework of MITT, with the support of FRiO, a face-to-face round table was held on the topic “Development of the Russian hotel industry: frank conversation”. The discussion was attended by leading experts of the industry and the public sector, moderated personally by Vadim Prasov, Vice-President of the FRIO for the hotel business. The participants of the discussion discussed the current situation on the market that has developed after the departure of many large foreign players, problem areas and growth points, the impact of support measures on the operating and investment business, as well as promising development markets.
Started the discussion with up-to-date market analytics and trends, who are waiting for the industry in 2023 Valentin Miklyaev, CEO and CEO of Bnovo, a cloud service to increase the income of hoteliers:
— More than 14 million bookings go through our service a year, and we see growth in direct sales. The share of OTA is now on a plateau, and directly direct bookings through the module are gaining momentum. According to our data, the OTA share is currently 28%, and 72% are bookings made directly and through the module. What is nice to note: the percentage of cancellations is falling.
Separately, I want to focus on an important global trend that is coming to Russia. It lies in the fact that OTAs stop developing their extranets and transfer part of the functionality to channel managers and PMS. Another trend worth mentioning, of course, is mobile first — a focus on mobile traffic, simplification of working with sales channels through the API, and the development of a trend towards the use of flexible pricing tools. We at Bnovo are now paying special attention to these tools.
Then, Maxim Brodovsky, CEO of AZIMUT Hotels, shared his observations on how the market is rebuilding after the departure of foreign hotel brands:
– At the moment, we can say for sure that there is a high demand for the actions of professional management companies. We see a high volume of management requests. Of course, owners who have worked with foreign hotel brands need time to accept changes and rebuild processes. But time goes literally for days and weeks. Now the last stage of this restructuring of the market is far from going on: there will be more than one or 2 iterations of this process. Moreover, so far there are few strong domestic brands on the hotel market. A foreign brand is still a great competitive advantage, although we look at how strong the management team worked with the brand. Now the players have to replace that part of the market that has been vacated, but not all Russian players take the same proactive position in the industry as foreign companies did before. And for lending banks, it is still important that the loan be repayable, no matter whether it is preferential or not.
Artem Pashkevich, project manager of JSC Hotel Company, assesses the situation on the market in the following way:
“Now we have to wait for the moment when the situation on the market finally stabilizes and understand which foreign brands will still remain, because many of them are interested in this. We, as owners of such assets, are still waiting. As for our city hotels, there are no global problems now, there is growth, and we see great development potential in the regions. If we talk about the situation in Moscow, last year there were big losses, but we managed.
Note that managing resorts requires certain specific competencies that differ significantly from hotel business in the context of city hotels. And in the Russian Federation, this market is still developing, because demand has been formed for years, but has not been satisfied.
Mikhail Sheldunov, Director of the Department for Cooperation with Government Authorities of Corporation Tourism.RF, spoke on behalf of the public sector:
— The current picture is that businesses are actively using lending at a special low rate and, thanks to government support, can use specialized tools to support a tourism investment project – from targeted subsidies to project co-financing.
It is more efficient to create any long-term projects for the development of territories with state support.
Separately, I would pay attention to another trend. This is the implementation of urban projects that are localized around large cultural, historical and architectural sites. The state is looking in this direction: ministries and municipalities have been actively working to improve urban areas for several years. An example is ethno-cultural and craft clusters that create new impressions and emotions for tourists.
Maxim Brodovsky, CEO of Azimut Hotels: < /p>
– I think that in the coming years there will be about 50-70 new projects with the concept of all-season operation and a developed infrastructure of various scales, although I note that not all of them will be exactly resorts. And here, of course, a viable financial model is important.
From the point of view of the investment climate, the sanatorium direction is an important direction for the entire hospitality industry in Russia, Vadim Prasov believes. Mikhail Sheldunov, Director of the Department for Cooperation with Government Authorities of Corporation Tourism.RF, agrees with him:
— In the context of investments, of course, the sanatorium direction should be considered separately, because our country has really huge potential in this regard. The last “golden” period of construction and development of sanatoriums took place in the USSR, and the material base, of course, is already outdated. But at the same time, there is also an unconditional reputational potential of those health resorts where there are traditions in certain profiles and in which you can improve your health. There is demand, and there is room for development, but we need a high modern level of service and infrastructure.
Artem Pashkevich, Project Manager, JSC Hotel Company ”:
– I agree, and the market is now in search of optimal solutions in the sanatorium direction. And we are also looking in this direction, but there are no ready-made solutions in the industry yet.
Maxim Brodovsky, General Director of AZIMUT Hotels:
— I would like to note that the expansion of the hotel chain in the direction of sanatoriums helps to diversify risks. Today we have a fairly balanced portfolio, consisting of urban, suburban and recreational facilities. One of the investment trends now is suburban and resort facilities, rather than city hotels. And judging by the current realities, in the foreseeable future, the trend for suburban objects will prevail.
The task of any major hotel operator is to create a complete picture for the client, a specific brand ecosystem for different needs. Such an ecosystem so that a client with your brand first goes on a business trip, then to improve his health in a sanatorium, and then with his family to the sea. There is no doubt that the sanatorium direction has great prospects, including in terms of profitability for the brand.