Moscow’s hotels are projected to see growth of 20-30 percent in revenue per available room (RevPAR) during the FIFA World Cup tournament months of June and July 2018, according to the latest market forecast from STR and Tourism Economics. However, such a RevPAR increase would be less than the growth seen in Rio de Janeiro (2014) and Johannesburg (2010), key markets for the previous two FIFA World Cup host countries.
While occupancy is likely to grow between eight percent and 10 ten percent in absolute levels to just under 80 percent during the World Cup months, Moscow’s average daily rate (ADR) is projected to increase between 15 percent and 20 percent. That trend would be consistent with previous World Cup tournaments as STR analysts note that room rates are more significantly boosted by the event, whereas demand remains fairly stable in year-on-year comparisons.
STR analysts note that while demand is helped by such a large event, year-on-year occupancy comparisons are typically hurt due to supply growth, as well as other regular hotel business avoiding the market during major event months. Supply growth leading up to such “mega events” creates more room inventory and pressure on occupancy levels.
In Rio de Janeiro in 2014, occupancy rose by double-digits from the previous June (+12.6 percent to 81.6 percent) and July (+18.3 percent to 80.0 percent) in the market. At the same time, ADR increased 72.8 percent and 64.4 percent during the two months, respectively, driving RevPAR increases of 94.5 percent.
In Johannesburg in 2010, occupancy jumped from the previous June (+27.7 percent to 78.5 percent) and grew to a lesser degree in July (+7.4 percent to 63.7 percent). ADR increased 56.3 percent and 44.5 percent during the two months, respectively, driving RevPAR increases of 99.6 percent and 55.1 percent.
Moscow’s room count is substantially higher than in Rio and Johannesburg. That also creates less opportunity for substantial uplift in performance in percentage terms, from a comparable number of additional visitors traveling for the tournament.
Through the first four months of 2018, Moscow saw occupancy grow 6.7 percent year on year to an absolute level of 65.8 percent. Using the same four-month year-on-year comparison, ADR was down 0.8 percent to RUB 5,363.70. Preliminary data for May showed occupancy at 74.8 percent (+11.5 percent) and ADR RUB 5,451.5 (+3.1 percent).