Gulnara Safina: "Events as a Driver of the Hotel Market"

The manager of the hotel "Relita-Kazan", the President of the Association of hotels of Kazan and Tatarstan made a presentation "Events as a Driver of the Hotel Market": in January 2017 at the general meeting of hotels of the Republic of Tatarstan it was decided to create the Association of hotels of Kazan and Tatarstan. This was one of the most important events for our hotel industry. Today the Association includes 60 hotels in the republic from the cities of Kazan, Naberezhnye Chelny and Elabuga.

The Association of hotels is a professional association of hotels created to protect the interests of hoteliers and provide assistance in basic professional issues.

There are a lot of tasks for the Association of hotels, especially I would like to highlight the main ones:

1. Creation of an open platform of interaction and cooperation and exchange of experience of the hotel industry with the authorities, with specialized educational institutions, tour operators, with large Russian hotel communities (Federation of Restaurateurs and Hoteliers, RGA, etc.) and so forth.
2. Creation of a unified system of hotel informing about laws, upcoming events, professional actions and interests.
3. Assistance to the members of the AH in carrying out professional activity, protection of interests of hospitality industry enterprises.

During the short period of the existence of the Association of hotels, the following has been held:

1. The cycle of meetings "Business and Authority: Frank Talk" on the subject of hotel checks;
2. The Extended Session on Hotel Security in July 2017;
3. Speech at the Council on Entrepreneurship under the President of the RT in January 2018;
4. Interaction with the following state authorities is established: The Department of Internal Affairs of the Ministry of Internal Affairs for the Republic of Tatarstan for the Russian Federation, the Ministry of Internal Affairs, the Ministry of Emergency Situations, Rosgvardiya, Rospotrebnadzor and others.
5. The memo on registration of foreign citizens was compiled jointly with the Department of Internal Affairs of the Ministry of Internal Affairs for the Republic of Tatarstan for the Russian Federation; the methodical instructions for the preparation of hotels on safety standards - with the Ministry of Emergency Situations.
6. The issue of providing parking for tourist buses from hotels in the city center has been solved

Also, there are still open issues of hotels that need to be solved:

1. prohibition of placing the roof signs of hotels in the center on the territory of the Security Zone Project "Ensemble of the Kazan Kremlin"
2. reduction (according to Moscow's experience) of the tax rate on real estate property and land tax rate, calculated now from the cadastral value
3. reduction of the tax rate on movable property of hotels

The volume of the key count as of January 1, 2018 was:

• collective accommodation facilities of 17,528 beds in Kazan,
• collective accommodation facilities of more than 38,000 beds in the Republic of Tatarstan.

According to the statistics provided by the Tourism Development Center of the RT, the average load of hotels in the city of Kazan increased slightly compared to 2016 with an indicator of 55% and reached the value of 56%. The dynamics of indicators for the average load of hotels in 2017 was ambiguous and in its majority was stated under the sign of decline in comparison with the indicators of 2016. The unpleasant surprise was the decline in the load indicators in April (-6%) and May (-4%) compared to 2016 - precisely in those months, which invariably were a period of high load. Also the decline was in August (-3%), September (-1%) and October (-3%). The growth in comparison with 2016 was recorded in February (+2%) and March (+6%), June (+5%), July (+3%) and December (+4%).

Hotel indicators such as the Average Daily Rate (ADR) and the Revenue per available room (RevPAR) in 2017 have risen and have shown positive dynamics.

Thus, despite the decline in load in most months of 2017 relative to 2016 (except June, July, November and December), the growth of tariffs since the beginning of the year and the holding of the FIFA Confederations Cup in June, and as a consequence, the rise in Average Daily Rate and Revenue per available room allowed the hotels to achieve positive dynamics in comparison with 2016 and to increase annual figures on revenue and profitability.

For comparison data on load of Moscow and St. Petersburg:

So, according to the analytical agency "Cushman & Wakefield", "... for the first half of 2017 (January to August), the load indicators of Moscow do not show the convincing growth - neither in volumes, nor in tariffs, except for the FIFA Confederations Cup".

According to Hotel Advisors, hotels in St. Petersburg "... according to the results of 3 quarters (January-September) in 2017 showed a significant decline in the load and only the increase in prices allowed them to increase their profitability indicators".

Analyzing the load schedule for Kazan in 2017, we see that the peak of the load falls on the months and days of major events. The growth of the indicators in comparison with 2016 was fixed:

• in March (+6%) – children's festivals and vacations;
• in June (+5%) – the holding the FIFA Confederations Cup;
• in July (+3%) - the beach games competitions, Red bull air race,  International Conference MINEPS VI, Sabantuy, Summer Campus of the Presidential Academy, TNA fights and other events;
• in November (+4%) - the holding of children's vacations and holidays, sports competitions of the Swimming Championship and Swimming Cup;
• in December (+4%) - the celebration of the New Year holidays.

If we remember 2010 and 2011, such a growth was brought by such large-scale events and actions as the rock festival "Creation of the World", the tour of the Cirque du Soleil and the concert of Elton John in 2013.

As we see any show, ceremony, concert, various theatrical performances, festivals, also holding major sporting events or holding business international symposiums, conferences, seminars can be an excellent source for growth in the load and revenue of infrastructure venues: during the huge events, hotels, restaurants and shops selling souvenirs and other thematic attributes are also earning.

As examples of the world practice of using events to attract attention to the city and the country, one can mention:

1. the Carnival of Brazil and the Carnival of Venice
2. the Flower Parade in Amsterdam in September
3. the Moldova wine festival
4. the Oktoberfest in Germany
5. Fashion shows in Paris and Milan
6. Montreux Jazz Festival
7. Salzburg Music Festival
8. Kinotavr Film Festival in Sochi

How much it is interesting and profitable can be judged by the example of the large-scale Munich annual beer festival Oktoberfest. It lasts 2 weeks. Beer there really flows like water: for each festival its guests drink about six million litres of this beverage. According to statistics, at this time the city takes about six million tourists and the turnover of financial resources at the holiday is about 450 million euros.

All of the above mentioned proves that event tourism is a powerful driver for the hotel industry and the entire tourism industry as a whole. It is able to attract big money into the economy of the region and increase the load of hotels, restaurants in the period of traditionally low season."