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Moscow is the largest city in Russia and on the European continent. It is the seat of power of the government and a major economic, cultural and scientific hub, all of which drive the city’s hotel demand. The city’s hotel market is primarily domestic and business-oriented, although prior to the war, leisure demand was experiencing an increase.

In 2018, the FIFA World Cup (which took place between June and July of that year) helped the Moscow hotel market achieve an incredibly strong performance, with RevPAR growth of nearly 30% in euro terms and more than 40% in local currency. During June and July alone, the city saw RevPAR triple from 2017 levels. While performance levels naturally dropped from the 2018 World Cup peak, Moscow maintained impressive occupancy and average rates throughout 2019, with the positive experience international guests had in 2018 carrying over.

While GDP declined by only 3.1% in 2020, owing to the pandemic, the hospitality industry was hit hard. Demand was half of 2019 levels and average rates dropped by more than 15% (local currency). In 2021, Moscow hotels performed extremely well relative to the rest of Europe and, at nearly 60%, achieved the strongest occupancy of all major markets reviewed for the HVI. Following the impact that the pandemic had on the economy, Russia was showing healthy recovery until February 2022 when the war with Ukraine commenced. While international sanctions on the country put a halt to most international visitation, domestic demand managed to support volume levels in 2022, and rate returned to pre-pandemic levels in euro terms. In 2023, Moscow’s occupancy increased by some 15%; however, this was paired with a similar decrease in average rate, resulting in a flat RevPAR over 2022. We highlight that the market has become increasingly opaque following the departure of international brands, generally more sophisticated property managers, more adept on tracking and reporting of data.

The Moscow pipeline shows eight new developments, totalling around 1,000 rooms, expected to come to market within the next six years. Some of the most notable ones include the 65-room Mandarin Oriental Moscow (December 2028); the 118-room MGallery by Sofitel Moscow Zubovskaya (January 2026); the 154-room Raffles Moscow Zaryadye (April 2024); and the 150-room Novotel Moscow Comcity (September 2024). Most international brands have left Russia since the start of the war, and it remains uncertain that the brands currently associated with these project will remain in place upon opening if the war is ongoing.

There have been relatively few transactions in the past few years, and the prices of most of the properties that have transacted tend to be either undisclosed or rumoured. The only notable disclosed transaction in 2021 was the 150-room Hotel Peking, which sold for approximately €53.5 million (€357,000 per key). No transactions were reported in 2022. A March 2023 transaction involved Russian investment firm Cosmos Hotel Group completing the acquisition of a number of Russian companies that owned ten hotels with 4,078 rooms across four Russian cities, for €200 million (€49,000 per room). No other transactions were reported in 2023. This reflects the special circumstances surrounding the few occurring sales, which would not be a fair reflection of a fully functioning investment environment. Owing to the circumstances mentioned earlier, 2023 values decreased by 29% in euro terms and by 13% in local currency.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

ADR Change
Market Demand Change
Hotel Occupancy Increase/Decrease
RevPAR Change	0.0%
Market Supply Growth

Change In Value For Market: (€Euro)

Moscow RevPAR Change (€Euro)

Moscow RevPAR (€Euro)

For more information, please contact:

	Sophie Perret, MRICS, MBA Managing Director [email protected] +44 0 2078787722 (w) +44 0 7725781037 (m)
	Julia Dzerkach Associate [email protected] +44 0 2078787742 (w) +44 0 7912240964 (m)
	Clemence Sennavoine Associate [email protected] ++44 0 7736273439 (m)