“While the economy is improving for the whole country, this hasn’t impacted on business travel”
“Ukraine’s proud capital city plays a
key part in the symbolism of the nation, offering an outdoor haven of lush greenery. It’s easy to see why this destination may appeal,” says OAG of Kiev’s potential. The data firm also looks forward to the arrival of Ryanair in October, saying it “will be a major stimulus to the market”.
VISA RULES LOOSENED The country’s business travel market should also benefit from a deal with the European Union to liberalise visa rules, allowing Ukrainian visitors to enter EU countries for up to 90 days without needing a visa. These new rules will not apply to entering the UK and Ireland. But despite these positive developments, business travel in Ukraine still has a long way to go to recover from where it was before the conflict started three years ago. FCM’s Tachovsky says: “The market hasn’t returned to pre-2013 levels before
the revolution and due to the war, Ukraine hasn’t seen any new foreign investors. But, in general, the banking and financial sector has started to pick up and we are seeing new booking requests from local clients. “While the economy is improving
for the whole country, this hasn’t fully impacted yet on the business travel industry, but we expect an upturn to come soon,” Tachovsky adds. Less positively, Tachovsky says that a
“freeze” on credit within Ukraine is also a major cashflow issue for local TMCs as delayed payments can create a “serious problem” for agencies to manage when borrowing rates are at 30 per cent. As the IMF predicts, growth in Ukraine is
likely to be “modest” in the next few years, due to “significant external and internal headwinds”, including the ongoing conflict in the east, but at least there are some reasons for cautious optimism.
Kiev, Ukraine: modest growth predicted by IMF
Hotel rates
HOTELS IN SEVERAL MAJOR CITIES IN EASTERN EUROPE enjoyed a booming first half of 2017 thanks to strong growth in both business and leisure travel.
The hotel industry has achieved record-breaking RevPAR (revenue per available
room) during the first four months of the year, according to hotel data firm STR. Sofia in Bulgaria and the Serbian capital Belgrade saw the biggest year-on-year increase in average RevPAR – with rises of 20.1 per cent and 18.7 per cent respectively
when measured in local currencies.
There were also major year-on-year RevPAR rises for Budapest (+13.5 per cent), Tallinn in Estonia (+14.4 per cent) and Vilnius, Lithuania (+9.1 per cent)
Sofia, Bulgaria: hotels are enjoying a boom 88 BBT July/August 2017
“Budapest benefited from hosting several trade events earlier this year in addition to a lack of new supply entering the market,” noted STR in a recent market report. Pricewaterhouse Coopers (PWC) expects the hotel market in the Hungarian capital to continue to boom into 2018 when it is predicting RevPAR to increase by 9.9 per cent compared to this year. PWC says ADR (average daily rate) in Budapest is likely to increase by 7.4 per cent from €79.30 in 2017 to €85.20 next year. The rise is expected despite plans in the Hungarian capital to add another 2,600 hotel rooms by the end of 2018.
A favoured MICE location, the Czech capital Prague, is set to see ADR increasing over the next couple of years, although not at the same pace as in 2016 when ADR rose by 7.1 per cent. PWC expects ADR to be €85.20 this year and pick up by 3.9 per cent to €88.50 in 2018.
“Looking beyond 2017, room prices could be influenced by the expected appreciation of the Czech crown,” adds PWC. “On the supply side, we do not expect significant growth in the number of rooms in Prague until 2019.”
Events hotspot Vienna is expected to see a small increase in hotel rates next year with an ADR of €99 this year which is forecast to rise to €100 in 2018, with “occupancy rates near capacity”. There are four hotel projects under construction in the Austrian capital, which will add a total of 1,270 rooms.
BUYINGBUSINESSTRAVEL.COM
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