the hotel real estate market in Ukraine

The hotel real estate market in Ukraine: the consequences of the pandemic

The hotel real estate market was seriously damaged during the pandemic and is still recovering rather poorly. And if in some European cities the situation is getting better, in Ukraine the dynamics is still too low.
The tourism sector is underdeveloped in Ukraine, accounting for about 3% of its GDP. For comparison, in the world average this index is 10.3%. The thing is that tourism in Ukraine is not a significant element of the economy, as a result, these segments are allocated little money for its popularization. Moreover, there is no stable systematic support at the national level, as in European countries.
The pandemic has become a serious test for the hotel business. When surveyed in 2020, more than 90% of companies noted a drop in demand for room and suite rental services. Only 4% of hotel operators did not feel the negative effects of quarantine restrictions, among them were those who increased their profits. As statistics show, for 5 months of lockdown in the country the turnover in the hotel business declined by 70-90%. This can be seen in the size of the tourist tax. If in 2019 its volume was 35 million hryvnias, in 2020 this figure dropped by 80%. On average, the loading of hotels was at 27%, and for break-even operation of the segment it is necessary at least 30%.
This year, experts predict that the loading will not exceed the share of 60% of the indicators of 2019. One of the important factors will be the restoration of transport links with other countries, and the development of the domestic market.

the hotel real estate market

In 2020, approximately 90% of companies have reduced income, of which 31% of them decreased by 40-60%, 21% of operators by 60%, 17% of respondents spoke about a decrease of 25-40%.
One should take into account the fact that the hotel sector is a costly business. Therefore, for many the decline in revenues was a disaster.
From the major tourist centers of the country the biggest loss was felt in Lviv and Kyiv. Odessa and the region managed to improve the situation due to the holiday season, when the loading was at 68%, which corresponds to the figures of past years. At the same time in Lviv there was a lack of tourists about 60-70%, and the loading was not more than 40%. The most acute negative impact of the pandemic and lockdown was felt in Kyiv. Here attendance was the lowest for the last 25 years – 10-20%. In premium hotels and business class this figure was 5% in the spring of 2020, and rose to 10% in the autumn.