According to the survey, conducted by Hotel.info service last year, Kyiv is among top-five European cities with most expensive hotel services. More expensive accommodation can be found only in Stockholm, London, Oslo and Moscow. At the same time, the level of service quality in the capital does not meet the European standards yet. Results of Euro-2012 proved that the problem exists. Thus, the majority of European football fans (middle class people) preferred to stay in mini-hotels, hostels or accepted couchsurfing offers. As a result, Kyiv hotels did not receive expected profits.
Many tourists, both foreign and Ukrainian, simply cannot afford prices of Kyiv hotels. The problem can be solved with the construction of one- or two-star hotels, but for some reasons investors refuse to build them in the capital. Why?
They look but do not come
According to the tourism department of the Kyiv city state administration, as of 2012 the capital numbered 163 various types of lodging with total of 11 539 rooms: 123 hotels with 10079 rooms, 26 dormitories with 1191 rooms, 14 tourist resorts with 268 rooms. Moreover, there are 37 health resort institutions with 9705 beds.
In particular, the capital offers services of 24 three-star hotels with 4139 rooms, 21 four-star hotels with 2428 rooms, five five-star hotels with 1190 rooms, only six one-star hotels with 175 rooms and 19 two-star hotels with 891 rooms. At the same time, there are 48 hotels with total of 1256 rooms of no category and 38 hostels with 1852 beds.
However, they are not enough. According to Dmytro Novitski, head of the main community facilities department of the Kyiv city state administration, only 3.6 hotel rooms accrue to one thousand of Kyiv residents, while according to the average European standard of hotel industry this index must be at least seven.
Kyiv hotel industry does have growth potential. 2.816 million tourists visited the city in 2012, which is 32% more than in 2011 (1.898 million), including 2.57 million foreigners. For nine months of 2013 the city was visited by 1.81 million guests, which proves the interest to our country grows. However, representatives of hotel business admit that hotel services are misbalanced in Kyiv: four and five-star hotels are too many, while the demand for establishments of mid-range segment is big, considering that the majority of travelers are young people, but remains unmet.
President of the Tourist Business Leaders Association Oleksandr Novikovski admits that high prices for accommodation are among the reasons why tourists do not hurry to visit our country.
“Many tourists from all over the world search our country through internet, but only few come. Ukraine has proved it is a European state with high-class hotels, but rooms in five-start hotels costing 200-400 euro per night do not encourage tourists to visit it. At the same time, two- and three-star hotels are not numerous and most of them are outdated, though the prices remain high – 100$ per night on average, while in European countries tourists can book rooms at 15-25 euro,” the specialist explains.
In turn, executive director of the Association of small hotels and apartments of Ukraine Anton Matiyash says that the majority of hotels of average price class target business travelers, thus seasonality plays an important role – on week days hotels are all booked, but on weekends, holidays and summer months stay empty. According to the expert, adequate price for business-class room in Kyiv must make about 500-600 hryvnias, while in practice hotels ask more.
No tourists – no way
So, what are the obstacles that impede Kyiv hotel sector to develop and meet demands of all categories of guests regardless of season? The majority of specialists agree that absence of planned policy is the main reason.
“Following the growth of tourist inflow new hotels will open regardless of the state or other factors. The question is why to open hotels if there is no planned state policy on tourism promotion in Kyiv and Ukraine in general. The sector of two- and three-star hotels is underdeveloped in the capital and will expand ultimately, but it is impossible without development of the city as a cultural and tourist center,” Anton Matiyash believes.
In turn, Oleksandr Novikovski believes that our country must work on mass tourist product. “When Ukraine starts offering tourist programs costing, for example 300 euro for a week of stay, we will immediately see an inrush of tourists.” According to Novikovski, European tourists will highly appreciate such programs, as they are used to save money and do not spend much on traveling.
At the same time, director general of the Association of hotel unions and hotels of Ukrainian cities Mykola Yevdokymenko tells several other reasons why the hotel sector does not develop actively. According to him, entrepreneurs do not want to open hotels of average price class due to high taxes and tariffs for communal services.
“VAT makes 20%, and tariffs for communal services are nine times higher than should be. That’s why prices in hotels are so high,” he believes.
Moreover, many hotel buildings have been transferred to state property for state needs. “Take for example the hotel “Zolotoy Kolos”, which has been transferred to the Foreign Intelligence Service Ukraine. Hotels must be returned to hotels, and only the state administration can do it,” Yevdokymenko explains.
Many experts also believe that though the service in Ukrainian hotels is at high level, there is still a problem of insufficient qualification of personnel. “The level of service in Ukrainian hotels is decent, but due to absence of complex approach to personnel training hotel workers are not always ready to meet the challenge at proper level,” Anton Matiyash says.
At the same time Mykola Yevdokymenko believes that the very specialists are more than enough in Ukraine. “Hotel specialists are thick as blackberries. In soviet times there were only two vocational schools graduating hotel workers – in Kharkiv and Kyiv. Now there are 113 universities, and if earlier graduates were obliged to work for two years in a hotel by order, now all these graduates are our of jobs. However, I still think that the service quality of Ukrainian hotel workers is high.”
According to the Strategy of Kyiv development, by 2025 the city authorities promise to increase the number of hotels twice and attract five million tourists annually by means of developing new tourist destinations. Europeans already share their experience, while businessmen and investors share their means. Moreover, the Association of hotel unions and hotels of Ukrainian cities jointly with the Ukrainian union of manufacturers and entrepreneurs promise to submit a draft bill on reduction of VAT rate and communal tariffs for hoteliers. It is devoutly to be hoped that the hotel industry will obtain everything it needs for development, considering that cheap hotels provide a benefit for all parties interested – the city, tourists and country’s economy.