You're reading: Ibis takes charge in economy segment of hotel market

Ibis, a global economy hotel chain, plans a massive expansion in the Kyiv hotel market.

Since 2011, one Ibis hotel has been operating in Kyiv — the 212-room Ibis Kiev City Center on Taras Shevchenko Boulevard.

But by the end of 2017, a second Ibis hotel will open in Kyiv. And two more are to follow in the next several years.

Ibis has found the sweet spot in Ukraine’s hotel industry — modern comfort at low rates, usually $50 to $70 for a room, for those who don’t want or can’t afford five-star luxury prices and who don’t want to check into dingy Soviet-era hotels.

While Kyiv is rich with premium-class hotels, the economy three-star segment is wanting.

While almost half of the hotel rooms in Kyiv fall into the three-star category, only 23 percent of them belong to hotels with international operators. Most hotels in the class are renovated Soviet-era buildings, like Dnipro, Salute and Kozatsky, all boasting prime location yet little comfort.

Given the abysmal competition, international low-rate chains with a recognizable brand like Ibis are almost destined to be successful.

This is what happened to the first Ibis in Kyiv. Opened in August 2011, within three months it reached 80 percent occupancy, according to Andriy
Davidenko, the general manager at Ibis Kiev City Center.

Now it boasts a yearly average 80 percent occupancy, hotel management said. If true, this is twice more than the average occupancy in the Kyiv hotels — which stood at less than 50 percent in the first half of 2016, according to the real estate consulting firm Ukrainian Trade Guild.

Kyiv once had such a chronic shortage of hotels that people found it cheaper and easier to rent apartments. The city’s 110 hotels are well-stocked on the high and low ends. That left room in the economy segment, for such players as Ibis, Holiday Inn and Park Inn.

The second Ibis hotel is under construction on the southern side of the main railway station. It is supposed to open by the end of the year.

The second Ibis hotel is under construction on the southern side of the main railway station. It is supposed to open by the end of the year. (Kostyantyn Chernichkin)

Expansion

Back in 2011, plans were made to open a second Ibis hotel next to the southern exit of the Kyiv Central Railway Station. The construction started, but was frozen due to the EuroMaidan Revolution that drove Kremlin-backed President Viktor Yanukovych from power on Feb. 22, 2014, triggering Russia’s invasion of Ukraine and a war that continues today.

The war has hit the hotel industry hard, including Ibis, where 60–70 percent of the guests are business travelers. Davidenko said that occupancy fell 20 percent in 2014, but has recovered since.

If it wasn’t for the war, the second Ibis could have opened two years ago, he said.

Now its opening is planned for autumn.

The construction of the 280-room hotel at 6 Polzunova St. is coming to an end, and McDonald’s is already operating on its ground floor. The rooms will have a new design that Ibis has begun using in the past couple of years.

True to its focus on the business guests, the new hotel will feature four conference halls of various capacities. Two more Ibis hotels will follow, but there is no dates for their opening.

One, on Peremohy Avenue, will open within the next couple of years. Like the existing Ibis and the one opening in 2017, this hotel will be close to the city central railway station. Internationally, Ibis is known to prefer locations near railway stations, airports or city centers. It will be under a combined operation of Ibis and Adagio, another brand of Accor Hotels corporation.

Another hotel is planned for the Podil neighborhood. But it is too early to speak about its opening, Davidenko says.

Once up and running, all three new Ibis hotels will add 680 rooms to the Kyiv hotel scene, chief operating officer of Accor Hotels in Russia, Georgia & CIS Alexis Delaroff told ABCnews.com.ua last year.

The three-hotel expansion in Kyiv isn’t something out of order, according to Davidenko.

“This decision was made based on the occupancy growth and prognosis,” said Davidenko. “If you look at other European capitals, they have at least two Ibis hotels, and more often three or four.”

Other hotels

Ibis’ expansion plan is slightly undermined by the opening of Park Inn by Radisson on Troitska Square — also close to the railway station — this June.

Kyiv’s first Park Inn is of a higher, four-star category than Ibis. It belongs to Rezidor Hotel Group, a competitor of the Accor Hotels.

The presence of Accor Hotels in Kyiv will increase this year: Davidenko revealed that the company is fi nalizing negotiations to rebrand one of the existing hotels as Mercure, another popular brand that has been missing at the Kyiv hotel scene.

Outside of the capital, the group is about to open a fivestar boutique hotel M Gallery in the center of Odesa. And in Lviv, the country’s unofficial western capital, Accor Hotels has been operating Ibis Styles since 2015.

Like other international hotel groups, Accor Hotels isn’t an investor in any of its hotels in Ukraine, instead operating the hotels funded by the local investors.

Full list of shopping centers and supermarkets under construction and scheduled to open in 2017-2018