Russia's economic woes affect Warimpex's hotel revenues

Difficult conditions in the Russian market and the soft ruble are affecting the earnings of Warimpex Finanzund Beteiligungs, a Vienna-based real estate development and investment company focusing on hotels in Central and Eastern Europe. 

While the performance of hotels that are not dependent on Russian clientele was good in all markets—occupancy and room rates were increased at the majority of the hotels and the NOP per available room rose by 14 percent—the continuing weakness of the ruble caused revenues to decline at the hotels in St. Petersburg and Ekaterinburg. Property Magazine International is reporting that revenues at the Russian hotels were roughly 34 percent lower than in the previous year, and the Dvorák spa hotel in the Czech town of Karlovy Vary has not yet seen a recovery, either. While efforts are being made to attract more guests from other countries beyond Russia, this reorientation has not yet had an impact on revenues. The Dvorak hotel reportedly suffered a revenue drop of around 36 percent.

Overall, the company's total revenues from hotel operations fell by 12 percent to €41.6 million. Consolidated revenues fell by 18 percent from €55.9 million to €46.1 million. 

But despite the consequences of the difficult conditions on the Russian market, Warimpex also saw some positive news: At the end of September, the company sold its majority stake in the angelo and Liner hotels at Koltsovo International Airport in Ekaterinburg to a private investor. “The withdrawal from Ekaterinburg should not be interpreted as a withdrawal from Russia – Russia will remain one of our most important core markets, where we are making good progress in the development of Airportcity St. Petersburg and still see tremendous potential. The Zeppelin office building was just completed here at the end of June, and the tenants have already moved in,” Warimpex CEO Franz Jurkowitsch said. In Berlin, the sale of the andel’s hotel closed at the beginning of September for a profit of roughly €10 million.