MARKET ANALYSIS OF HOTEL SERVICES IN UKRAINE

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  Iryna Antonova

Abstract

The subject of this research is the market of hotel services in Ukraine in recent years, since the market for the hotel services in Ukraine emerged in the first half of the 2000s. Initially, the focus of both local and foreign investors was on the development of the hotel market in Kyiv. Gradually, with the development of hotel business in Ukraine, investors’ interest began to shift in the direction of populated cities, primarily large business centers of the country (with a population of about 1 million people) such as Kharkiv, Donetsk, Dnipropetrovsk, Lviv and in the direction of resort areas – Crimea, Carpathians, Odessa. According to the World Tourism Organization during the past 24 years the income from international tourism has increased by 9%. The number of international tourists every year is growing at a rate of 4%. Active development of hotel real estate segment was highly influenced by the European football championship held in 2011 due to the requirements of the cities-organizers which hosted matches (Kyiv, Kharkiv, Donetsk, Lviv) to have certain number of hotel rooms of different categories.
Purpose. The study is an analysis of the problems in the market of hotel services and prospects for their solution. Hospitality industry in Ukraine is one of the fastest growing sectors of the economy. It is pleasant to note that new hotels, rest houses and resorts are being opened while the existing hotels are being reconstructed to meet higher levels of services. Unsaturated market of hotel services of different levels creates a great opportunity for international hotel operators to enter Ukrainian market with confidence and expand its influence in the industry by the means of its internal policies. Therefore, this study is very relevant in the modern realms.
The methodological base of research were works of domestic and foreign authors dedicated to the problems of the hotel industry development. Existing problems in the hospitality industry:
1. Tendency toward market being filled with foreign companies
2. At the present stage of economic development in Ukraine there are only two national hotel operator – Premier Hotels and Resorts and Reikartz Hotels & Resorts.
3. Market of hotel services in Ukraine is now approaching saturation in the sector of five-and four-star hotels.
4. The formation of situation explained above leads to the gradual saturation of high-end hotel market as well as increase in the number of foreign companies in the market. As a result some companies have to work together and develop a common business strategy.
5. Sector of hotels of three stars and below remains unsaturated and represented mainly by the hotels with extremely low-maintenance and a small set of services.
6. There is no significant improvement in the activity level in the sector of hotel services in Ukraine, with Ukrainian companies delaying their market entrance. This can lead to the market being filled by the foreign hotel chains. At the same time western investors do not want to start their business in Ukraine without active presence of Ukrainian companies.
7. Due to the nature of specific markets it is impossible to provide adequate assessment of the situation in the industry. It is necessary to view different sectors of hotel services separately.
8. The problem of effective management remains important to national hotels. The shift from administrative methods of management to market methods was not easy and oftentimes managerial team that was supposed to maintain high levels of performance works on development. This shortcoming has also to deal with the founders/owners of the hotels.
9. The issues related to the interaction with the government still remain problematic for the national hotel chains.
Those issues include the process of hotel registration, plot allotment for the hotel construction, mandatory procedures in the fire and health departments, as well as obtaining of the necessary permits and certificates.
10. The issue of standardization is also problematic because of inconsistencies between Ukrainian and European systems of standardization of hotel services. It is estimated that 80% of hospitality real estate including hotels, in need of repair and reconstruction. These ambiguous situations complicate and slow down the activities of the companies in the hotel sphere. Yet, national hotel operators have an advantage being aware of existence of such matters and having knowledge of national legislation.
Conclusion. Despite the difficult political and economic conditions emergence of new national hotel operator in Ukraine is not a utopia, moreover, such attempts are made today. In the sector of hotel services of the highest category national operators face stiff competition, not only price based but also competition based on quality. To win such competition while maintaining individual brand is possible only by maintaining faultless management and marketing. Emergence of national hotel operator is most likely in the sector of middle-class hotel services because this segment is unsaturated and also very promising. Hotel facilities in this case will be based mainly in the regional centers and will be unionized by the single concept. In any case, the development of Ukrainian hotel operators will mean a transition to a new level in the framework of the global market of hotel services. If before Ukraine was only described as undeveloped and unsaturated new market, the creation of a national network will create a new player in the global hotel market.

How to Cite

Antonova, I. (2015). MARKET ANALYSIS OF HOTEL SERVICES IN UKRAINE. Baltic Journal of Economic Studies, 1(1), 10-16. https://doi.org/10.30525/2256-0742/2015-1-1-10-16
Article views: 387 | PDF Downloads: 24

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Keywords

hotel, market, economics, marketing, market research, stardom, infrastructure, tourism.

References

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Gulyaev, V. (2000) Organization of tourist activity: Textbook. Moscow, Nolydzh, 312 p.

Lesnik, A. (2003) The practice of marketing in hotel and restaurant business. Moscow: Infra, 488 p.