Freefall. Only every third room is booked in Kyiv hotels

Ukrainian hotels continued empty

Photo: Ukrainian photo

Ukrainian hoteliers cannot find customers. In the first six months of the year hotels in the capital were booked by 27%, while during the same period last year - by 50%, Director of the Hotel Business Department at JLL consulting David Jenkins said in a conversation with Capital. “Such a low occupancy rate has been observed in hotels of different categories,” says Executive Director of the Association of Star Hotels of Ukraine Dmytro Prokhorov.

Fewer tourists

The situation in the regions is no better. Vice President of the Association of Small Hotels and Apartments Roman Ponomarenko said hotels in Kharkiv are suffering from a shortage of visitors. “Hotels in Donetsk are surviving thanks to international journalists and foreign observers,” adds Prokhorov.

Contrary to predictions tourists did not go en masse to western Ukraine. Director of the Karpaty Travel agency Tetyana Yosypenko says from January to June the number of tourists has decreased by 10-15% compared to the same period last year. “In spring there were almost no tourists,” she added.

Lviv hotels are also short of clients. Over the first six months of this year, their occupancy rate dropped by 20–25% and today this figure is 40–60%, says representative of the Lviv City Council Andriy Moskalenko.

“In June, the occupancy rate dropped by 30% in many spas, such as Truskavets, Morshyn, etc.,” says Director of the Tourist Information Center Volodymyr Tsaruk. He added that the situation is much better only at beach resorts on the mainland of Ukraine – now local hotels boast an occupancy rate of almost 100%.

Prices are going down

The main reasons for the sharp decline in occupancy rates in hotels are the military operation in the eastern oblasts, as well as the loss of purchasing power of Ukrainians due to the rough devaluation of the national currency from UAH 8 to UAH 11.7 for a dollar. “Ukrainian tourists have no money,” says Tsaruk. Foreigners do not go to Ukrainian resorts. Yosypenko says this year Russians did not come to the Carpathians. In the past year, according to her estimates, they accounted for 10 – 15% of the total number of tourists.

To retain their customers, hoteliers lowered their prices. Jenkins says that while in the first six months of 2012 the average price of rooms was US $250 per day, this year it is US $192. But hotels are willing to make additional concessions. “Now Kyiv hotels offer standard rooms for EUR 70 per day, while its base price is EUR 260 per day,” adds Prokhorov.

The major hotels in Lviv are ready to give up to a 40% discount on their prices of accommodation, which today range from UAH 100 to UAH 550 per night for a room on package tours, says Moskalenko. Hotels in the Carpathians are offering discounts of up to 10% to guests that rent rooms for more than five days, says Yosypenko. “Due to the fact that hotels in the Odesa oblast did not raise their prices, they have attracted a lot of tourists,” says Tsaruk.

The situation will not improve

By the end of the year the situation will not improve. Most likely Lviv will not accommodate the expected 2 mn tourists, predicts Moskalenko. He says the city has already revised its program of festivals taking into account the situation in the country. If the military conflict ends soon, this year Lviv will be able to accommodate more than 1 mn tourists “Once the tents are cleared from the center of Kyiv, the situation will stabilize” says Ponomarenko.

Now hotels are forced to downsize their staff, close some bars, some of the floors, while hotels in the resort cities offer “all inclusive” services. Prokhorov says hoteliers do not risk closing down their hotels, as this will create problems in the future. He said that they will need to spend more money on finding personnel, connecting communications and paying for renovation after the winter season without heating.