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KPMG IN RUSSIA AND THE CIS
International
hotel operators
in Russia and
the CIS
2015
kpmg.ru
Hospitality & Leisure
Advisory Services
c | International hotel operators in Russia and the CIS
Contents
A few words about franchising 3
franchising Components of successful franchising 5
Franchising in Russia and the CIS 6
Russia & CIS vs. other global regions 6
Russia & CIS specifics 7
3
How much does it cost? 8
Manchising – An option to consider? 9
Third-party operators – Extra benefits
or extra costs? 10
Conclusion 11
Introduction 12
countries Russia 14
report Azerbaijan 17
Armenia 18
Belarus 19
12
Georgia 20
Kazakhstan 22
Kyrgyzstan 24
Turkmenistan 25
Ukraine 26
Uzbekistan 28
© 2015 ZAO KPMG. All rights reserved.
International hotel operators in Russia and the CIS | 3
franchising
A few words about franchising
10–15 years ago franchising of trademarks and technical know-
agreements were seldom seen in how) which benefits both parties to the
the hospitality industry in Russia transaction.
and the CIS. This was chiefly due
For franchisors, the gains mainly
to the existence of an immature
come from achieving rapid growth at a
market that lacked professional
minimum level of investment –
players who were prepared to run
this helps create the critical mass
a hotel business according to high
(“minimum efficient scale”) that
international standards. These days,
is necessary to gain access to the Franchising
however, international hotel operators
core benefits of running a chain of
view expansion via franchising as
hotels. Franchising provides increased provides increased
being almost as appealing as direct
business activity with lower capital business activity
management.
risk, and as an option is usually with lower capital
Franchising began in the US in the late preferable to company ownership
1940s, when the concept was applied in cases where a high level of initial risk...
as a distinct means of launching a investment is required, or where
new business, as opposed to a way of there is high growth. The scale effect
distributing an existing product. combined with a flat organisational
structure help ensure lower operating
The franchising format involves the
and administrative costs, as well as
owner of a brand name and business
improved purchasing power with
(the franchisor) transferring through
suppliers through increased sales
a contract (the franchise agreement)
volumes.
the right to use a name and format to
another party (the franchisee), typically In franchising the primary advantage
for a fixed period and in an agreed for the franchisor is that franchisees
location. In return, the franchisee are more highly motivated than
pays an initial fee and subsequently paid managers. Hence franchising
a royalty based on a percentage can help turn franchisees into bona-
of revenue generated. Essentially, fide entrepreneurs. “Independent”
the concept involves a transfer of business owners that are close to
intellectual property rights (in the form markets are in the best position to
© 2015 ZAO KPMG. All rights reserved.
4 | International hotel operators in Russia and the CIS
nurture such markets and to flexibly structure usually available only to major
operate the business to meet the hospitality chains. The franchise has
demands of their business. The already created a brand name, and the
franchising structure enables the chain franchisee reaps the benefits from
to be more responsive to customers this, in addition to attendant extensive
and to be more flexible in terms of promotional campaigns. Franchisors
service needs. Many organisations often provide both operational and The franchisee
believe that franchisees at a local business management training to
benefits from
level can better identify opportunities, franchisees, as well as site selection
cultivate key relationships, ascertain and general start-up assistance. acquiring the rights
customer requirements, and more Franchisors typically provide pre- to own and run a
effectively manage costs. Franchising opening staff training, comprehensive
paves the way for new ideas, products operating manuals, and ongoing
proven format while
and services that come about as a support. In contrast to an independent at the same time
result of the innovative and creative entrepreneur, a franchisee has the gaining access to a
approaches that tend to be used in this option of calling on the support of
concept. a large, experienced franchisor. In support structure
The franchisee in turn benefits from
addition, compared to other small usually available
start-ups, the franchisee is exposed to
acquiring the rights to own and run only to major
a significantly lower risk of failure.
a proven format while at the same hospitality chains.
time gaining access to a support
© 2015 ZAO KPMG. All rights reserved.
International hotel operators in Russia and the CIS | 5
Components of successful franchising
Many branded hospitality service proficient practitioners. The franchisee
organisations have achieved growth exists not only as a client, but also
through deploying techniques as a partner who runs and grows the
borrowed from manufacturing business for the franchisor.
to establish uniform, reliable and
Most franchisor organisations
standardised brands. In connection
stipulate that franchisees work
with this, a common issue for Franchisors are
according to set brand standards. The
franchise organisations is that they
must manage the tension that
actual brand not only establishes a responsible for the
market presence, but it also involves
exists between standardisation and overall brand offer,
adhering to a level of conformity that
control on the one hand and business while franchisees
constrains independence: as a result,
freedom and flexibility on the other. At
the same time, the franchise should
franchisor organisations must monitor deal with decisions
the franchisee operation. Customers
be sufficiently decentralised to foster governing more day-
these days expect a brand to deliver
creativity and be responsive to local to-day operations...
a consistent and reliable service, and
service needs.
the franchisor organisation must
The franchise should be both stable ensure that customers know what to
(so that all members – both direct expect and have their expectations
employees and franchisees – know its satisfactorily met. Franchisors are
mission and aims) and dynamic so that responsible for the overall brand offer,
services reflect and meet changes in while franchisees deal with decisions
customer needs and environmental governing more day-to-day operations
circumstances. Many hospitality (recruitment, quality standards,
service organisations offer brands advertising, etc.)
that are uniform and meet customer
In order to reduce the threat of
security needs; however, increasingly,
opportunism and to respect the
services should reflect the “customer
closely aligned interests of the
as individual” – thus they need to
franchisor and franchisee, detailed
appreciate individual and regional
franchising contracts are created.
variations and tastes.
In a survey (National Westminster
Franchisors have no single base of Bank/FBA Survey, British Franchise
power and decision making. Unlike Association), around half of all
a traditional command and control franchisees globally opined that such
organisation, franchises have multiple contracts favour the franchisor, while
centres, as individually franchisees the other half stated that they felt they
have rights and commitments which were neutral. That said, franchisees
restrict the franchisor’s capacity are usually prepared to tolerate any
to exercise controls. Although constraints in view of the benefits
the franchisor initially has specific that they secure from the relationship
knowledge and capabilities and (essentially, a franchisee is buying
can provide support to franchisees, into a business concept that has
franchising entails layers of expertise been tested in practice and shown
rather than a centralised group of to work). This means that the level of
self-contained professionals typically risk to the franchisee is lower than
found within traditional structures. that associated with starting a new
Franchisees have immediate, front-line business. As with “empowered”
knowledge of the business, as well managers or employees, a franchisee
as knowledge of the various business must be ready to work within a
functions and how they affect the system designed by the franchisor’s
business. Hence an interdependent management and accept the
relationship exists in which franchisor constraints which it sets.
and franchisee are both skilled and
© 2015 ZAO KPMG. All rights reserved.
6 | International hotel operators in Russia and the CIS
Franchising in Russia and the CIS
Russia and the CIS vs. other on these initiatives and are willing to Compared to mature markets in the US
global regions expand their network via franchising, and Europe, regional markets in Russia
while other international chains still and the CIS are at an early stage of
Franchising has in recent years favour developing through direct franchising development. Figures also
become a hot topic in the Russian management contracts. In addition, show that in terms of the proportion of
and CIS hotel market. Many investors local third-party management franchised vs. managed hotels within
have now gained sufficient experience companies are expanding in the major hotel chains, there is a trend of
and are seeking to manage their region, and international operators are underdevelopment related to franchise
own properties, but under an entering the market. models in the Russia and CIS region.
established brand name. Some
brands are prepared to cooperate
Starwood Hotels & Resorts Hotels Carlson Rezidor
18% 6% 32% 29% 17% 83%
20% 80%
Russia EMEA Russia
4% 25% EMEA 1% 2% & CIS
& CIS
USA 76% Americas
39%
71%
97% Midle East,
Africa and Asia
Pacific
100%
Owned Managed Franchised Owned Managed Franchised
Source: Starwoodhotels.com Source: Carlson Rezidor data
InterContinental Hotel Group Accor Hotels
0.2%
15.6% 45% 27% 41% 9% 91%
0.1%
5.9%
Europe Russia Russia
& CIS Worldwide
& CIS
USA 84.2%
55% 32%
94%
Owned/Leased Managed Franchised Owned/Leased Managed Franchised
Source: ihgplc.com Source: accor.com
Hilton Worldwide
34% 29% 43%
2% EMEA Russia
7%
& CIS
37% 57%
Americas
9% 8%
91% Midle East,
Africa and Asia
Pacific
83%
Owned/Leased Managed Franchised
Source: ir.hiltonworldwide.com
© 2015 ZAO KPMG. All rights reserved.
International hotel operators in Russia and the CIS | 7
Russia and the CIS specifics in terms of getting established in the
capitals of these countries.
As the market matures, more
investors are showing a willingness In Russia, hotel companies are
to get into hotel management and interested in significantly expanding
to structure their own professional into regional cities. As the targets
teams. Representatives of major of hotel companies in terms of the
hotel chains operating in the Russian number of operating hotels in regions
market claim that in recent years grow, smaller cities are becoming
more owners have been requesting more interesting for brands. Regional
franchising agreements and not The majority cities have a cap that can be achieved
management contracts. The majority for ADR, consequently there is a
of international hotel chains in Russia
of franchise business rationale for developing
and the CIS are still not ready to agreements in mainly midscale and budget brands
entrust the management of hotels Russia and the in such destinations. The potential
under their brand to investors with margins of such properties do not
no related industry experience. That
CIS are signed for always motivate hotel chains to take
said, the degree of strictness applied budget/midscale full responsibility for operations; in
in reviewing investor profiles varies brands... addition, paying a fee to engage a
from one hotel company to the next; hotel chain to run the property will not
for example, Marriott International necessarily bring added value to the
Inc. accepts the franchising model owner. Thus franchising represents
only if the management company the most optimal method for brands to
that will run the hotel is on the list develop in regions.
of Marriott’s approved companies. brands (Ritz Carlton, Sofitel, MGallery, The need to raise debt financing for
Such approved companies currently Planet Hollywood, W, St. Regis, hotel projects can act as an additional
include professional international Intercontinental, etc.) This can be incentive for a franchising practice
third-party management companies explained not only by the reputational to expand. As hotel projects are not
(for example, Interstate Hotels & risks involved in such a move, but normally a top priority for Russian
Resorts) with a proven record of also by the higher margins that luxury bankers, having the name of an
managing successful hotel projects hotels generate for management international brand adorning the hotel
in the region and management teams teams. property constitutes an advantage
nurtured by Marriott via a process of for financial institutions potentially
Each hotel company has its own
direct management during the initial interested in financing such projects.
strategic priorities in terms of
years of operation, such as Comfort
the geographical location of their
Hotel Management. Marriott is
managed/franchised properties,
willing to consider other companies,
and not all markets in Russia and
as long as they can demonstrate
the CIS are equally attractive for
the necessary level of experience
brands. The majority of companies
and expertise. Wyndham prefers to
agree that the most promising CIS
expand its presence in the region by
opening hotels under its brands in
countries in terms of development Franchising
are Azerbaijan, Kazakhstan, Georgia, represents the
collaboration with known-in-the-market
Armenia and Ukraine (as soon as
Russian and international third-party most optimal
the current geopolitical situation
operators, while Intercontinental Hotel
Group, Accor and some other chains
stabilises). Attitudes vary among hotel method for
chains when it comes to entering brands to
are prepared to consider entering
new markets. Some are ready to
into franchise agreements with less develop in
expand into unexplored locations only
experienced owners.
through franchises, due to the lower regions.
The majority of franchise agreements operational risks franchise agreements
in Russia and the CIS are signed provide; however, some chains are
for budget/midscale brands, such prepared to manage properties in such
as Hampton by Hilton, Holiday Inn destinations to ensure that the brand’s
Express, Days Inn, Ramada Encore, reputation and standards do not suffer
Ibis, Novotel, and Courtyard by under local management. Countries
Marriott. It is very unlikely that hotel such as Uzbekistan, Tadzhikistan,
chains would entrust to individual Kyrgyzstan and Turkmenistan are of
investors the management of their top interest for hotel operators primarily
© 2015 ZAO KPMG. All rights reserved.
8 | International hotel operators in Russia and the CIS
How much does it cost?
Key issues to consider during the • T
he marketing fee covers an • T
he loyalty fee is part of a franchisor
property franchising decision-making operator’s various promotional loyalty programme. Often the fee is
process is fee structure and amounts activities related to increasing calculated as a percentage of total
to be paid. Some structures differ brand awareness among the target revenue generated by loyal guests,
from operator to operator; we have audience and developing new brand and typically ranges from 3 to 5
consolidated the general conditions initiatives. The fee, which is usually percent.
an investor may come across in the based on gross room revenue
Depending on the operator and project
majority of franchise contracts. Most and sometimes on total revenue,
there may be additional system and
of the figures are confidential; for typically ranges between 2 and 3
technical support services provided
convenience we cite some ranges. percent of room revenue or 1 and 2
by the hotel chain and related fees
percent of total revenue.
A typical fee structure involves: stipulated in a contract. Another
• T
he reservation fee covers costs common requirement, cited by all hotel
• A
n initial fee payable by the
associated with an operator’s chains, is that the general manager of
franchisee on the execution of the
reservation system, such as central a property must be approved by the
Franchise Agreement associated
office operations, respective brand. Some franchisors offer extra
with the initial granting of rights and
personnel, and all distribution- services for franchised properties. IHG,
costs incurred by the franchisor. Its
related fees. Rates and the way for example, provides staff outsourcing
aim is to cover the operator’s initial
they are calculated vary between services for such key hotel positions as
costs, (i.e. from reviewing the site,
different operators and depending revenue manager or general manager,
market potential analysis, evaluation
on which systems they use. Rates as well as hotel performance support
of the hotel’s plans / existing layout).
may be charged as a percentage or (several visits per year, assistance on
The initial fee typically takes the
a fixed amount charged per booking, reviewing marketing / sales plans and
form of either an amount based on
depending on the brand. strategies etc., in order to maximise
the hotel’s room count or a fixed
owner profit).
amount. This fee is sometimes non-
refundable.
• T
he royalty fee is a recurring fee the
franchisee pays to the franchisor,
and covers the use of a trademark
and a trade name, as well as
continuing franchise services.
The fee is typically based on room
revenue and usually varies between
4 and 5 percent of gross room
revenue. Some operators add 2
percent of F&B revenue to room
revenue.
• T
he technical services fee covers the
brand’s costs during the provision
of ground support to the franchisee
development team related to the
design and development of the
hotel. A technical service agreement
(TSA) ensures that after a project has
been completed it complies with
brand standards and is operationally
efficient. Technical fees usually
range from USD500 per room for
rebranding projects to USD1,000 for
greenfield projects.
© 2015 ZAO KPMG. All rights reserved.
International hotel operators in Russia and the CIS | 9
Manchising – An option to consider?
In addition to traditional franchise brands and to exercise a degree of
agreements, hotel chains operating operational control in the initial years
in the Russia and CIS region have as the brand undergoes a ‘ramping
begun to implement the practice of up’ period. These agreements also
“Manchising”, which involves the give owners flexibility in terms of
following: being able to cut expenses in the
subsequent years of a property’s
• owners engage an operator for an
Manchising operation, after management teams
initial period until the performance
agreements also give have gained sufficient experience.
of the property stabilises (around
owners flexibility in five years)
terms of being able to • the contract then reverts to a
cut expenses in the franchise contract under which
the owner assumes management
subsequent years of a responsibility and retains the
property’s operation, operator’s brand, for which he
after management pays an annual franchise fee
teams have gained Despite the hotel management
model changing, there is no impact
sufficient experience.
on the external running of the hotel.
Such structures are particularly
useful in terms of helping hotel
operating companies to launch new
© 2015 ZAO KPMG. All rights reserved.
10 | International hotel operators in Russia and the CIS
Third-party operators –
Extra benefits or extra costs?
Another option for managing a of several brands if a brand has not
hotel property is to attract a third- been chosen. Investors that plan to
party management company which operate a number of properties, and
specialises in providing such services are unsure about committing to a
for hotels. A professional third- particular brand, would be better suited ...the third-party
party management company can working with one third-party operator management
benefit inexperienced owners who that manages their properties under
do not wish to be involved in the various brands, or no brands at all. This company can help
hotel’s day-to-day operations, and would also allow the management owners avoid
engaging such a company does not company to cluster some positions, unnecessary costs
necessarily mean in practice having and thus improve the operational
a three-sided arrangement between efficiency of the managed hotels. and align a property
the brand providing the franchise,
The combined fees of a third-party
to the standards of
the management company running several brands ...
operating company and the franchise
the hotel, and the owner. Third-party
fees for the brand will most likely
management companies are able
equal or exceed those of signing
to more objectively advise owners
one direct management contract
on whether they should brand their
with a hotel company. However,
property – some hotel projects may A number of international companies
such a dual structure gives extra
not obtain any added value by having operate hotels in Russia and CIS,
flexibility to owners, since the terms
an international brand name; however, including Interstate Hotels & Resorts
of management contracts with
having an experienced management (the largest global third-party hotel
third-party companies are usually
team in place, whose remuneration is management company, operating
shorter than those with hotel chains
linked to hotel performance, will most properties all over the world under
(10-15 years, vs. 20-25). In addition,
likely benefit the owner. 40 brands). The company was the
management contract termination
Such third-party companies generally clauses are usually less stringent, first to establish in the region and
work with a number of hotel chains and if an owner is not happy with the has the biggest portfolio of brands
and brands and may propose a number brand or management company it is and hotels under management (13
of options to owners suitable to each easier to replace one of them rather properties, with over 4,000 rooms).
project. When suggesting a brand, than terminate the direct management Hotel chains are keener to entrust
they tend to be more interested in the contract with the hotel chain. In such upper-scale brands to international
potential performance of a project than cases any negative impact on the management companies (Interstate
in promoting a particular hotel chain. hotel’s day-to-day operations will be Hotels & Resorts, Sophos Hotels,
During the construction phase, the minimal and the investor will incur Vienna International) when signing
third-party management fewer losses. franchise agreements. However, local
company can help owners competitors are also gaining in terms
avoid unnecessary costs of both experience and in the number
and align a property of properties they manage. Companies
to the standards such as BS Hospitality management
and IFK Hotel Management currently
operate properties under the brands of
Third-party one hotel company (Hilton and Louvre
Hotels, respectively); however, IFK in
management a recent interview with us stated that
companies are able to more to become more competitive in the
objectively advise owners market it plans to expand in the near
future its portfolio of brands.
on whether they should brand their
property
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 11
Conclusion
In order to arrive at a conclusion on the in implementing this structure than
expansion of franchising in Russia and others, but, that said, an overall
Franchising has become the CIS, we analysed operator pipelines increase in the number of franchised
in terms of the number of franchised hotels in the market pipeline can be
a development priority vs. managed hotels. No specific trend observed. The introduction of so-called
for all hotel chains. appears to unite all brands operating in “Manchise” contracts also reflects
the market or clearly demonstrates that that hotel chains in Russia and the CIS
franchising has become a development are beginning to get more confident
priority for all hotel chains. Some about the ability of owners to manage
hotel companies are more proactive properties.
© 2015 ZAO KPMG. All rights reserved.12 | International hotel operators in Russia and the CIS
countries report
Introduction
The expansion of international hotel operators in Russia and potential economic growth of some countries, another 194
the CIS is progressing quite rapidly, with approximately 200 hotels with a total room stock of nearly 37,300 units are due
hotels now operating in the whole region and 70 operating to open in the region by 2020 (59 hotels / 10,400 rooms
in CIS countries (excluding Russia). Even though the current in the CIS, excluding Russia) according to the pipeline of
economic climate is creating uncertainty in relation to the international hotel chains.
Rating of international operators by presence in Russia and CIS market
Rooms Hotels
Rezidor Rezidor
Marriott Marriott
InterContinental Accor
Accor InterContinental
Hilton Hilton
Starwood Starwood
Rixos Wyndham
Hyatt Rixos
Wyndham Hyatt
Kempinski Louvre
Fairmont Kempinski
Louvre Existing Addition by 2020 Fairmont Existing Addition by 2020
Sokos Sokos
Capella Capella
Other Other
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 0 10 20 30 40 50 60 70 80 90
Source: KPMG analysis
Rating of international operators by presence in Russia and CIS market
Other Other
Starwood 9% Starwood
Rezidor 7% Rezidor
Fairmont 5% Fairmont 6% 20%
3% 25% 2%
Accor 11% Accor 19% Forecast
2014 6% Hilton for 2020
9% Hilton
Hyatt 4% 2% Rixos
Louvre 2% 4% Rixos
Hyatt 4%
13% 11% 2% 12% InterContinental
Marriott 4% 3% InterContinental Louvre 9% 4% 4%
Marriott Kempinski
Wyndham Kempinski Wyndham
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 13
Currently the leading hotel company in the region is Carlson Based on our interviews conducted within the frame of the
Rezidor Hotel Group, with 41 hotels and a total inventory of survey with the representatives of major hotel chains in
nearly 11,000 rooms operating under its brands in Russia Russia and the CIS, there has been no considerable drop-off
and the CIS. By 2020 the leader in terms of number of in investor interest towards the hotel market, who plan to
operating hotels is projected to change to Accor Hotels, continue implementation of already started projects, despite
which is forecast to have 85 properties with a total inventory adverse geopolitical and economic conditions. However we
of 15,400 rooms. believe that projects on early stage of development may be
frozen and initiation of new construction may be put on hold
until the situation stabilizes.
Distribution of branded room stock and hotel supply in Russia and CIS market
Rooms Hotels
60,000 7,000 300 35
6,000 30
50,000 250
5,000 25
40,000 200
4,000 20
30,000 150
3,000 15
20,000 100
2,000 10
10,000 50
1,000 5
0 0 0 0
Other
Other
Kazakhstan
Azerbaijan
Turkmenistan
Uzbekistan
Tajikistan
Kyrgyzstan
Kazakhstan
Azerbaijan
Turkmenistan
Uzbekistan
Tajikistan
Kyrgyzstan
Russia
Georgia
Armenia
Russia
Georgia
Armenia
Ukraine
Belarus
Ukraine
Belarus
Existing Addition by 2020 Existing Addition by 2020
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.14 | International hotel operators in Russia and the CIS
Russia
In terms of hotel network Russia is the most developed development, although regional markets are also seeing
country in the CIS, with 131 hotels in operation and around active development. Whereas in the past hotel operators
136 in the pipeline. Recent geopolitical and economic events preferred to establish a presence in cities with a population
have worsened the business environment outlook, and as a exceeding one million, now they are actively seeking to
result of banking sanctions financing costs could increase. expand their networks into regional centres with more than
300 thousand inhabitants.
After recent economic and geopolitical developments
and an attendant slowdown in tourism activity, Moscow
remains the most attractive market in the country for hotel
Rating of international operators by presence in Russia
Rooms Hotels
Rezidor Rezidor
Accor Accor
InterContinental InterContinental
Marriott Marriott
Hilton Hilton
Kempinski Kempinski
Starwood Starwood
Wyndham Wyndham
Hyatt Hyatt
Domina Domina
Fairmont Fairmont
Louvre Existing Addition by 2020 Louvre Existing Addition by 2020
Lotte Lotte
Capella Capella
Other Other
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 0 10 20 30 40 50 60 70 80
Source: KPMG analysis
The majority of Russian room stock and hotels under Nikolskaya, which opened last spring under the Kempinski
international brands are concentrated in Moscow (38% brand, has changed operator to Starwood Hotels & Resorts
of current Russian room stock of international operators). and launched a new brand on the Russian market, St.
At present, 44 out of 340 hotels in Moscow, or 11,192 of Regis. Another trend witnessed this year is the expansion
46,989 rooms, operate under various international brands. of international hotel brands into the Moscow region, with
Upscale and luxury hotels currently account for the bulk of Radisson Zavidovo (239 rooms) and Hilton Garden Inn
the hotel supply in Moscow, while there remains a lack of Moscow New Riga (162) open in the first half of 2014. Two
international-quality hotel rooms priced in the mid range. No more hotels were open in Q3 2014 in the Russian capital:
new midscale hotels are expected this year, and the budget Four Seasons Hotel Moscow (180 rooms) and Double Tree
and midscale markets currently comprises only 12 hotels, by Hilton Moscow Marina (270).
with a total inventory of approximately 2,700 rooms.
By 2020 the room stock of hotel chains in Moscow is expected
Each year more and more international hotel chains are to rise to nearly 22 thousand, with 42 new properties creating
opening or assuming the operation of properties in Moscow, almost 11 thousand rooms, making the capital’s share of room
from established brands such as Marriott and Radisson, stock in the future supply of Russia 39%.
to relative newcomers such as Four Seasons. Hotel
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 15
Rating of international operators by presence in Moscow
Rooms Hotels
Accor Accor
Rezidor Rezidor
InterContinental InterContinental
Marriott Marriott
Starwood Starwood
Hilton Hilton
Kempinski Kempinski
Fairmont Fairmont
Hyatt Hyatt
Wyndham Wyndham
Lotte Lotte
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 5 10 15 20 25 30 35
Existing Addition by 2020 Existing Addition by 2020
Source: KPMG analysis
St. Petersburg, the second-most popular city in Russia for Two branded hotels opened in the first six months of 2014:
hotel operators and investors, is less stable than Moscow Indigo by IHG and Park Inn by Radisson Pulkovo Airport.
in terms of tourist flow, due to its high dependence on Currently over 70% of branded hotels in St. Petersburg
leisure travellers in summer, the peak season for the city. belong to the upscale or luxury segments, while almost half
Geopolitical and economic events this year have had an of pipeline properties belong to the midscale segment.
adverse impact on the number of tourists visiting the city,
New hotel brands are expected to enter the St. Petersburg
mostly represented by a decline in European and American
market in the near future: Hilton and Hampton by Hilton
travellers. Consequently, hotel occupancy in St. Petersburg
are due to open in 2015 (near the new Expo Center in the
has been negatively affected. Nevertheless, hotel chains,
city), while Golden Tulip Hotels is scheduled to commence
which have not yet established a presence in Russia’s
operations in the city in 1Q 2015, and Jumeirah is expected
second-largest city, are still looking for opportunities to enter
to launch in 2017.
the market.
Rating of international operators by presence in St. Petersburg
Rooms Hotels
Rezidor Rezidor
InterContinental InterContinental
Sokos Sokos
Marriott Marriott
Accor Accor
Rocco Rocco
Orient Orient
Corinthia Corinthia
Kempinski Kempinski
Four Seasons Four Seasons
Starwood Starwood
Domina Existing Addition by 2020 Domina Existing Addition by 2020
Hilton Hilton
Louvre Louvre
Jumeirah Jumeirah
Wyndham Wyndham
Lotte Lotte
Mandarin Mandarin
0 500 1,000 1,500 2,000 2,500 3,000 0 1 2 3 4 5 6 7
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.16 | International hotel operators in Russia and the CIS
Distribution of branded room stock in Russia,
After Moscow and St. Petersburg, the most developed by city
city in the country in terms of hotel infrastructure is Sochi,
whose leading position is explained by the recent Olympic
Games held in the city, which created great demand for 25,000 1,400
international standard hotels. Somewhat surprisingly,
Sochi’s development continued after the Olympics – five
1,200
more hotels, operated by Starwood Hotels, Marriott 20,000
International Inc., Hilton Worldwide, Accor Hotels and
1,000
Rezidor Hotel Group, are expected to add to the network of
20 existing branded properties in Sochi.
15,000
800
Among regional cities with a population exceeding one
million, the most developed in terms of number of hotel
600
properties are Yekaterinburg, Samara, and Kazan, with four 10,000
or more branded hotels already operating. A further 10
large Russian cities (population > one million) have more 400
properties in the pipeline than are currently operating. 5,000
Rostov-on-Don has the biggest pipeline among regional 200
cities, with six hotels scheduled to open within the next
four-to-five years under the Ibis, Mercure, Hyatt Regency,
0 0
Le Meridien, Sheraton and Ramada brands and none under
Other
Krasnodar
Moscow
Gelendzhik
Chelyabinsk
Murmansk
Krasnoyarsk
Novgorod Veliky
Vladivostok
Irkutsk
Novosibirsk
Petrozavodsk
Omsk
Izhevsk
Sochi
Kazan
Yaroslavl
Voronezh
St. Petersburg
Ekaterinburg
Samara
Kaliningrad
Nizhny Novgorod
Volgograd
international brands currently operating. The second-highest
number of projects (four) are being developed in Nizhny
Novgorod, where only one branded property, Ibis Centre
Nizhny Novgorod, has been opened. Cities with a population
Existing Addition by 2020
exceeding one million are due to have from three-to-eight
Source: KPMG analysis
branded properties up and running by 2020.
Among second-tier cities (population over 500 thousand), where one hotel, Hilton Garden Inn, has already opened and
Yaroslavl has the highest number of hotels operating under three more international hotels (Four Points by Sheraton,
international brands (Ibis, Mercure and Park Inn). In other Ibis and Adagio) are due to open in the next two years. Such
second-tier cities international brands have established a strong pipeline is explained by the dynamic development
a presence only in Krasnodar, Izhevsk and Lipetsk (Hilton of the automotive and related industries in the city.
Garden Inn and Marriott in Krasnodar; Park Inn in Izhevsk;
Another interesting case is the resort town Gelenzhik,
Mercure in Lipetsk). Cities such as Ufa and Tyumen each
where Kempinski has already established a presence, and
have four hotel projects in progress and no hotels operating
another branded hotel, Radisson Blu Primorye, is due to
at present. Other second-tier cities are set to open no more
open. Despite Gelenzhik having a population of only 65
than two properties by 2020, thus creating potential for
thousand, it attracts many tourists in the summer season.
further development for investors and brands.
The town is following the Sochi trend (the city is located
Looking at smaller regional centres, Kaluga is attracting not far from Sochi), where Soviet-era accommodation
significant attention from international hotel operators, and is gradually being replaced with international quality
is the only city with a population of less than 500 thousand facilities.
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 17
Azerbaijan
Travel and tourism continues to be one of the most brand, which has successfully penetrated the market with
crucial sectors for economic development in Azerbaijan, three resorts opening in recent years in Quba, Naftalan
especially in terms of sustaining employment growth. The and Seredil. All major international operators preferred to
tourism industry has made initial steps towards success, initially explore the market with luxury brands. Worth noting
as demonstrated by considerable tourist flow growth in is that there are some brands present in Azerbaijan that
2003–2013, when the number of foreign tourists visiting the have not yet entered the Russian market (Jumeirah and
country rose from around 600,000 to over 2.5 million. This Rixos). Wyndham Hotel Group is a current leader in the
was followed by a substantial rise in hotel construction. The Azeri market, with four properties operating (three in Baku
government forecasts a further increase of up to 3 million and one in Gence, with a total room stock of 438), while
tourists annually by 2015. Rixos takes second place with three operating properties in
the regional cities of the country. Other operators such as
The capital Baku is the most actively evolving market
Rezidor, Kempinski, Starwood, Fairmont, Hilton and Hyatt
in the region (with 12 out of 16 existing branded hotels
are represented by one operating hotel each and all intend to
in the country, providing 2,390 rooms in the city). The
open one or two properties more. The total branded pipeline
regional market is still not so attractive for investors; Gence
of the country is forecast to expand to almost 4,000 rooms
currently has a branded hotel Ramada Plaza (180 rooms).
in 21 properties by 2020.
Other regional properties are represented by the Rixos
Distribution of branded room stock and hotel supply in Azerbaijan, by city
Rooms Hotels
Baku Baku
Quba Quba
Gence Gence
Naftalan Naftalan
Seredil Seredil
Existing Addition by 2020 Existing Addition by 2020
Ismayilli Ismayilli
0 1,000 2,000 3,000 4,000 0 5 10 15 20
Source: KPMG analysis
Distribution of branded room stock and hotel supply in Azerbaijan, by operator
Rooms Hotels
Wyndham Wyndham
Rixos Rixos
Marriott Marriott
Kempinski Kempinski
Starwood Starwood
Fairmont Fairmont
Hilton Hilton
Rezidor Rezidor
Hyatt Hyatt
Jumeirah Existing Addition by 2020 Jumeirah Existing Addition by 2020
Four Seasons Four Seasons
InterContinental InterContinental
0 100 200 300 400 500 600 0 1 2 3 4 5
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.18 | International hotel operators in Russia and the CIS
Armenia
Over the past few decades the tourism industry has been At present four hotels are operating under international
a priority economic development area for the Government brands in Armenia, with a total of 526 rooms. By 2020
of Armenia. In February 2008, the government adopted a the total branded hotel stock is forecast to increase to
tourism development concept paper aimed at increasing 11 facilities and 1,704 rooms. Marriott International Inc.
tourism’s contribution to the country’s GDP. The number remains the market leader, with two operating hotels and
of international tourists to the country has been steadily a total of 326 rooms (in Yerevan and Tsakhkadzor) in its
growing since 2001. The CAGR for the number of incoming portfolio. Louvre Hotels Group manages a property with
tourists for the period 2001–2011 was around 18.74%, a total of 104 rooms in Yerevan. Finally, a recent addition
while the CAGR for internal tourism during the same (in 2013) to the branded market is a Hyatt facility, with 96
period stood at 13.9%. According to the Armenia Ministry rooms opened in Yerevan. Hyatt Corporation plans in early
of Economy, the total number of tourists in 2013 was 2015 to further open a second hotel under the Hyatt Place
approximately 1.08-1.09 million. The government has set a brand with 88 rooms in the spa resort town of Jermuk.
target of 1.5 million international tourist arrivals by 2020.
Wyndham Hotel Group plans to open two properties in the
Most international hotel operators in Armenia opened country, both located in Yerevan. The hotels will be open
their first hotels in the capital Yerevan, which remains the in 2015, both of them are at the final FF&E installation
leader in the country in terms of room stock and number stage. Accor Hotels is also targeting Yerevan and plans to
of hotel facilities. However, due to growth in tourist open two new hotels in the capital: one Ibis Yerevan and
flows to the resort towns of Tsakhkadzor and Jermuk, one Ibis Styles Yerevan, with a room stock of 240 and 110,
international hotel operators have begun to expand into respectively. Ibis Yerevan is planned to open in 2015, while
these cities too, following the trend of local hoteliers, construction of Ibis Styles Yerevan has been put on hold.
which have already established a significant presence
Plans to construct a hotel under the Kempinski brand in
there.
Yerevan have been put on hold, and currently there is no
publicly available information on the opening.
Distribution of branded room stock and hotel supply in Armenia, by city
Rooms Hotels
Yerevan Yerevan
Tsaghkadzor Tsaghkadzor
Jermuk Existing Addition by 2020 Jermuk Existing Addition by 2020
0 200 400 600 800 1,000 1,200 1,400 1,600 0 2 4 6 8 10
Source: KPMG analysis
Distribution of branded room stock and hotel supply in Armenia, by operator
Rooms Hotels
Marriott Marriott
Louvre Louvre
Wyndham Wyndham
Accor Accor
Hyatt Hyatt
Existing
InterContinental InterContinental
Addition by 2020 Existing Addition by 2020
Kempinski Kempinski
0 100 200 300 400 0 1 2 3
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 19
Belarus
In the past three-to-five years the Belarus Government has Prior to the 2014 hockey world championship the Belarus
demonstrated that it is serious about attracting foreign hotel market had only one internationally branded
investors into the country, with the travel and tourism hotel (Crowne Plaza Minsk) operating in the country.
industry being a major focus. A number of benefits and However, the holding of the championship stimulated the
tax breaks to stimulate foreign investment activity were development of the Minsk hotel market, and Renaissance
announced by the government to improve the image of Hotel opened in 2014, with a room inventory of 264 keys.
the country, and in order to prepare for the hosting of the
Despite the volatile economic situation in the country,
2014 Ice Hockey World Championship, the Belarusian
it is attracting more attention from international hotel
Government implemented a number of projects
chains, and seven hotel projects under the brands Accor,
aimed at developing the country’s travel and tourism
Hilton, IHG, Louvre Hotels, Marriott and Wyndham, with
infrastructure. These included the construction of new
a total room inventory of 1,176, are due to be completed
hotels, the redevelopment and reconstruction of existing
within the next two-to-three years in Minsk. Accor and
accommodation and hospitality facilities, improvements
Marriott will occupy the leading position in terms of
to road networks in the capital, and construction of an
number of properties in the country, with each due to have
ice-hockey arena. Minsk National Airport also underwent
two hotels operating by 2016. No other cities have been
a thorough refurbishment. The country’s tourism market
earmarked for hotel openings.
is characterised by a prevalence of business guests and
guests attending events. Almost 6.2 million foreign visitor
arrivals were registered in 2013, which included a 14%
increase in the number of organised tourists.
Distribution of branded room stock and hotel supply in Belarus, by operator
Rooms Hotels
Marriott Marriott
InterContinental InterContinental
Accor Accor
Hilton Hilton
Louvre Louvre
0 100 200 300 400 500 600 0 1 2 3
Existing Addition by 2020 Existing Addition by 2020
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.20 | International hotel operators in Russia and the CIS
Georgia
Georgia’s Tourism sector is a rapidly growing industry. operates two facilities in Tbilisi, with a total room supply of
The government of the country has identified tourism 245. Starwood Hotels & Resorts has one property under
as a key area of investment and development, and has its brand, in Batumi, with 202 rooms. The Ascott chain is
taken measures to attract investment into resort towns, currently also represented by one property, the Citadines
which comprise: Sun-beach resorts: Batumi, Anaklia Freedom Square Tbilisi hotel (66 rooms).
and Kobuleti; Winter Ski-Mountain resorts: Gudauri,
The forecasted openings of hotels under international
Mestia, Bakuriani, Goderdzi and Kazbegi, and Spa
brands shows a positive trend. Carlson Rezidor Hotel
resorts: Tsakhltubo, Borjomi and Akhtala. Tourist inflows
Group plans an expansion by opening three more
and investments are chiefly concentrated in Tbilisi and
properties: one in Tbilisi (Park Inn by Radisson Rustaveli
Batumi, however the government plans to open two free
Tbilisi) and two Radisson Blue hotels in the towns of
tourism zones in Anaklia and Kobuleti, which will boost
Gudauri and Tsinandali. It is expected that the total
investments for Black Sea resorts. In 2012 4.4 million
number of rooms by Carlson Rezidor Hotel Group will
people visited Georgia, representing an increase of 57%
reach 848 units, and that the group will thus maintain its
on 2011. Georgia had 22% more tourists in 2013 (5.4
current leading position. The InterContinental Hotel Group
million) than in 2012.
plans to grow its portfolio by another three new hotels in
For a long time the majority of branded properties in the the country: one with 200 rooms (Intercontinental Tbilisi)
country were concentrated in Tbilisi. However, alongside to be opened in the capital in 2016, and another two in
the rapid development of the seaside town of Batumi, Borjomi and Batumi. An 84-key Crowne Plaza Borjomi will
international operators began exploring Georgian regions open in 2015, while the Holliday Inn Batumi (148 rooms) is
more actively. In addition to Batumi, operators are scheduled for 2020. Hilton Worldwide plans to enter the
currently considering opening rather small hotels in other market with two hotels: one in Batumi and one in Tbilisi,
regional towns in Georgia, such as Gudauri, Tsinandali and which will provide a total of 412 rooms under its brands by
Borjomi. 2015.
At present six hotels operate under international brands The major international hotel chains Kempinski Hotels,
in the country, with a total room inventory of 1,116 units. Hyatt Corporation, Wyndham Hotel Group, Rixos Hotels
By 2020 this number is forecast to increase to 18 facilities and Accor Hotels plan to open one hotel each in Georgia
with 2,851 rooms. Carlson Rezidor Hotel Group holds by 2016; three of these facilities will be located in Tbilisi
the leading position in terms of room supply, with two and the others in Batumi. Together they will provide
operating properties in Tbilisi and Batumi and a total of an additional room supply of more than 643 units. The
417 rooms in its portfolio. InterContinental Hotel Group largest of the properties is planned to be the Grand Hotel
manages one hotel with 252 rooms in Tbilisi and ranks Kempinski Batumi, with 250 hotel keys; however, this
second in terms of room stock. Marriot International Inc. project has been put on hold.
Distribution of branded room stock and hotel supply in Georgia, by city
Rooms Hotels
Tbilisi Tbilisi
Batumi Batumi
Guduari Guduari
Tsinandali Tsinandali
Existing Addition by 2020 Existing Addition by 2020
Borjormi Borjormi
0 200 400 600 800 1,000 1,200 1,400 1,600 0 2 4 6 8 10 12
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 21
Distribution of branded room stock and hotel supply in Georgia, by operator
Rooms Hotels
Rezidor Rezidor
Marriott Marriott
InterContinental InterContinental
Starwood Starwood
Hilton Hilton
Kempinski Kempinski
Wyndham Existing Addition by 2020 Wyndham Existing Addition by 2020
Rixos Rixos
0 200 400 600 800 1,000 0 1 2 3 4 5 6
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.22 | International hotel operators in Russia and the CIS
Kazakhstan
In May 2014 the Government of Kazakhstan approved the end of 2014 Marriot international Inc. was leading
a blueprint to raise tourism’s share of GDP from the the way, operating five hotels in the country (in Astana,
current level of 0.3% to 3% by 2020. Almaty is now Aktau, Almaty and Atyrau), with a total room stock of
participating in a bid to host the 2022 Winter Olympics. 881. Rixos Hotels manages four properties, located in
The government will allocate USD4 billion of the 2020 Almaty, Astana, Shymkent and Borovoe. With a total of
blueprint’s USD10 billion price tag, with private investors 796 rooms, Rixos Hotels holds second place in terms of
expected to contribute the rest. room stock. InterContinental Hotel Group is represented
by two operating hotels in Almaty, with a total of 528
Excluding CIS countries, China and Turkey accounted for
rooms. Carlson Rezidor Hotel Group is represented by
the greatest number of arrivals in 2012; in 2013 a total of
two hotels located in Astana, with a total of 429 rooms.
6.8 million people visited Kazakhstan, which represents an
Wyndham Hotel Group manages one hotel in Astana with
approximate 11% rise on the previous year. The number
228 rooms. Hilton Worldwide is represented by Hilton
of internal tourists rose by 7.3% and reached 3.5 million.
Garden Inn in Astana, with a room inventory of 229 rooms.
A simplification of Kazakhstan’s visa policy with Hong
And Louvre Hotels Group also has one operating hotel in
Kong and potentially with a number of European countries
Almaty, with 166 rooms.
is expected to attract yet more visitors to the country.
One of the drivers of arrivals is increasing awareness of The considerable number of planned openings indicates
Kazakhstan as a travel destination. Foreigners enjoy the a positive trend in hospitality development in Kazakhstan.
country due to its exotic culture and unique nature. The Among others, Marriott International Inc. has announced
Shymbulak ski resort, the Medeo ice-skating rink (the it intends to increase its presence in the market with
highest skating rink in the world) and the Schuchinsk- another hotel in Astana that will add 157 rooms to its
Borovoye resort area (the so-called “Kazakh Switzerland”) portfolio; the total Kazakhstan room stock of the chain
are all very popular destinations among tourists. will increase to 1,038, and this will ensure that the chain
will retain its leading position in the country. Accor Hotels
The majority of branded hotels in Kazakhstan are divided
plans to open two new properties in Almaty and Astana,
between the cities of Almaty and Astana, representing
with a total of 448 rooms. Carlson Rezidor Hotel Group
31% and 38% shares of the branded hospitality market,
plans to expand with one additional property in Almaty
respectively. At the same time, there is a shift taking place
(Park Inn by Radisson Almaty Airport). Wyndham Hotel
to develop in other cites. Thus, an active pipeline of hotel
Group announced an increase of one hotel in Astana, with
construction can be observed in Atyrau, Borovoe, Aktau,
228 new rooms. Hyatt Corporation and Starwood Hotels &
Aktobe and Shymkent, where the opening of at least one
Resorts plan to each open at least one hotel in Kazakhstan
or two branded properties are planned. Astana in turn
by 2015 – one of the properties will open in Almaty, and
also continues a steady growth of its share of branded
another in Aktobe. Together these will add 447 keys to the
properties.
room stock. Future Hyatt Regency Almaty, with 270 units,
16 hotels are currently operating under the brands of will become the largest hotel in the pipeline. Meanwhile,
six major international hotel chains in Kazakhstan, with as at the analysis date, the construction of Kempinski
a total of 3,257 rooms. With nine new openings the Hotel Bayterek (218 units) has been put on hold and there
branded hotel market is set to expand to 25 facilities by is no publicly available information on its opening.
2020, and total room occupancy will reach 4,972. As at
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 23
Distribution of branded room stock and hotel supply in Kazakhstan, by city
Rooms Hotels
Almaty Almaty
Astana Astana
Atyrau Atyrau
Shymkent Shymkent
Borovoe Borovoe
Aktau Aktau
Aktobe Aktobe
0 500 1,000 1,500 2,000 2,500 0 2 4 6 8 10
Existing Addition by 2020 Existing Addition by 2020
Source: KPMG analysis
Distribution of branded room stock and hotel supply in Kazakhstan, by operator
Rooms Hotels
Marriott Marriott
Rixos Rixos
InterContinental InterContinental
Rezidor Rezidor
Wyndham Wyndham
Louvre Louvre
Hilton Hilton
Accor Accor
Hyatt Hyatt
Kempinski Existing Addition by 2017 Kempinski Existing Addition by 2017
Starwood Starwood
0 200 400 600 800 1,000 1,200 0 1 2 3 4 5 6 7
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.24 | International hotel operators in Russia and the CIS
Kyrgyzstan
In recent years, tourism has contributed approximately Branded hotels, providing a room stock of 242 units, are
4% of Kyrgyz GDP. More than half of tourists visiting located in the Kyrgyz capital Bishkek. The largest property
Kyrgyzstan go to Lake Issyk-Kul. Last year’s visa-free (178 units) is represented by the Hyatt Regency Bishkek
regime for citizens from 44 countries proved a success, Hotel of the Hyatt Corporation chain. The second operating
since the number of tourists from non-Soviet countries hotel, with 64 keys, is managed by Louvre Hotels Group.
was seen to grow significantly. Last year, Kyrgyzstan The announced pipeline is rather modest, consisting of
attracted 65,000 tourists from outside the former Soviet Novotel Bishkek (160 rooms) by Accor Hotels. However,
Union; the figure was 26,000 in 2012. this project has been put on hold.
Distribution of branded room stock and hotel supply in Kyrgyzstan, by operator
Rooms Hotels
Hyatt Hyatt
Louvre Louvre
Accor Accor
0 50 100 150 200 0 1
Existing Addition by 2020 Existing Addition by 2020
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.International hotel operators in Russia and the CIS | 25
Turkmenistan
Turkmenistan’s economy has been growing due to and legal conditions apply for foreign investors in order to
exploration of the country’s vast natural resources, with incentivise activity in the Avara Zone. Vast infrastructure
the gas sector playing the major role. The development and hospitality-related projects have already been
of the energy sector attracts the majority of foreign implemented and more are planned. Hotels of various
investment into the country, with China, Russia and Iran categories, cottages, waterparks, golf courses, tennis
the biggest partners and the main feeder markets for courts, restaurants, health & spa facilities, and conference
business tourism. As at the end of 1H 2014, two major centres, are planned to be located along a 16-kilometre
contracts with South Korean companies had been signed stretch of beach.
for a total of USD4 billion, and this should have a positive
Currently the development of the Avara Zone only
impact on the number of arrivals in the near future. An
stimulates domestic tourism, thus no international
increase in business arrivals to Ashkhabad has encouraged
hotel brands have been announced to open in the area.
the improvement of Ashkhabad’s infrastructure, as well
Stringent visa procedures and strict regulations for
as the opening of international brand hotels. Starwood
foreign travellers do no facilitate an inflow of international
Hotels & Resorts has two properties under its brands:
leisure tourists. The country would be able to attract more
Four Points by Sheraton (136 rooms) and Sheraton (120).
foreign tourists if the government relaxed the regulations
Accor operates one property under the Sofitel brand (299
and made greater efforts in relation to tourism-related
rooms). Together these three properties form a rather
marketing.
modest branded market of 555 rooms. At present no other
future projects have been announced.
Apart from increasing activity in the energy sector (which
drives business tourism), the government understands
the importance of recreational tourism. The Avaza Tourism
Zone, located on the Caspian Sea coast, was announced
in 2007 by the President of Turkmenistan as being a major
leisure destination for the country, with several billion
US dollars of investment already earmarked. Special tax
Distribution of branded room stock and hotel supply in Turkmenistan, by operator
Rooms Hotels
Accor Accor
Starwood Starwood
0 100 200 300 400 0 1 2
Existing Addition by 2020 Existing Addition by 2020
Source: KPMG analysis
© 2015 ZAO KPMG. All rights reserved.You can also read
