Luxury Hotels in Ukraine

2020 IMPACT

Value sales hugely impacted by lack of foreign visitors due to COVID-19

With luxury hotels closed for several months in 2020 due to COVID-19 and with only a tiny number of foreign visitors over the whole year, luxury hotels had a disastrous year in 2020, with absolute value sales almost halved. Even when the strict lockdown ended, there was no significant increase in value sales, as the majority of luxury hotel guests in Ukraine are foreign visitors and foreign visitor numbers did not pick up at all in 2020.

International hotels chains dominate and value sales remain relatively low

Luxury hotels in Ukraine is comprised of international chains. The capital city Kiev has the highest concentration of luxury hotels.

Potential for growth is thwarted by small number of high-income consumers in Ukraine

A significant increase in the number of luxury hotel rooms is unlikely in the short to medium term. The high-income population remains small, with the middle class still strongly affected by the Russia/Ukraine conflict earlier in the review period and now having to contend with the economic fallout from COVID-19.

RECOVERY AND OPPORTUNITIES

Once international travel resumes, value growth will return

Once the threat of COVID-19 subsides and infection rates start to fall as a result of vaccinations, global travel should start up again. Consequently, inbound travel into Ukraine should increase and as a result, value sales in luxury hotels should return to positive growth.

No significant increase in luxury hotel rooms over the forecast period

Though luxury hotels are expected to return to value growth over the forecast period, it will be from a relatively small base, with luxury hotels continuing to remain small in terms of value sales when compared with other similar countries. There is not expected to be a significant number of luxury hotels opening over the forecast period, and current operators will concentrate on providing unique experiences, in order to stand out from the increasing competition from cheaper hotels.

Potential legalisation of casinos could create opportunity for luxury hotels over the forecast period

All the leading players are international chains and seek to attract visitors by offering exceptional levels of service that meet international standards. As demand from domestic consumers is low, these players leverage their international names to appeal to wealthy foreign visitors.