The draft law on legalization of gambling, which is being discussed within the framework of the working group of the Verkhovna Rada, after its adoption could give a significant impetus to the development of five-star hotels and encourage investors to open new facilities in this segment, Managing Partner of ArtBuild Hotel Group Oleksiy Yevchenko believes.
“A significant impetus to the development of hotel business will be provided by the adoption of the law on gambling, which will regulate the placement of casinos in five-star hotels for a certain number of rooms depending on the region. Hotels for casinos could appear both in large cities and in smaller towns, causing the active development and growth of a certain region,” he said at the conference “Hotel Real Estate in Ukraine: Development Prospects.”
According to the expert, the bill has a chance to be adopted before the end of 2019 or at the beginning of 2020. According to the document, casinos will be placed in five-star hotels with over 200 rooms in Kyiv, and over 120 rooms in Kharkiv, Lviv, Dnipro and Odesa, and from 100 rooms in all other cities.
“This will only spur the development of the five-star segment. The question is whether we have the key targeted audience here and whether there are enough tourists to fill this particular segment. In Kyiv, the occupancy of five-star hotels is on average 38%. And if another five to ten objects are built, as there are already real investors interested in this, with the number of rooms exceeding 200, with large places for organizing casinos, what will happen to the economy of these hotels?” the expert said.
He said the draft law under consideration provides for a mandatory requirement for hotels: the availability of 500 square meters of free space for a casino.
“Out of about 70 five-star hotels in Ukraine, only eight to ten hotels have such a large free space. Therefore, it is very important how the bill is adopted,” the expert stated.
DEVELOPMENT, FIVE-STAR HOTELS, GAMBLING BUSINESS, LEGALIZATION
The average daily room rate (ADR) in five-star hotels in Kyiv in euros in 2018 increased by 15% compared with 2017, to EUR 150 per day, while the occupancy rate was still 45-50%, Natalia Chystiakova, the director of the appraisal and consulting department at Colliers International (Ukraine), has said. “The Kyiv market is represented by more than 100 hotels with 10,500 rooms and serves 1 million visitors per year. In 2018 the market actually came to life for the first time after the situation of 2013-2014. There was an increase in ADR and occupancy … If next year the situation is stable, a further growth is planned,” she said at a press conference at the Interfax-Ukraine agency.
According to the expert, for the whole year the ADR indicator in Kyiv hotels grew by 10% and is approaching the 2013 level. At the same time, in the segment of five-star hotels, the second year in a row shows a rather low occupancy rate of 45-50%, while ADR rose by 15%, to EUR 150 per day. At the same time, in the category of three- and four-star hotels, ADR did not grow over the year, but the occupancy rate increased by 5%.
According to a company press release, the average occupancy rate of four-star hotels in 2018 was 50-58%, three-star hotels some 55-65%. The room rates were EUR 80 in the four-star segment, and EUR 45 in three-star hotels.
