The war in Ukraine has had a profound impact on the economy, including the hotel industry. The year 2022 was challenging, with a significant drop in demand for hotel services and many establishments temporarily closing their doors. However, with its remarkable resilience and adaptability, the Ukrainian hotel sector bounced back in 2023, demonstrating its strength in the face of adversity.
The main trends:
- The growing importance of security:
Security has become one of the critical factors for customers. Hotels with shelters, generators, water tanks, conference rooms on the -1 and -2 floors, and other security features are more popular. - Refocusing on domestic tourism: One of the key trends in the Ukrainian hotel market is the shift towards domestic tourism. The decrease in foreign tourists and the suspension of air travel have prompted hotels to redirect their services to the domestic market. This shift has changed the demand structure and led to hotels catering to diverse customers, including business travelers, internally displaced persons, and Ukrainians exploring their own country.
- Changing the concept of regions: Until 2022, seasonality was clearly defined, but now it is somewhat leveled due to many factors, including restrictions on the movement of Ukrainian men, the closure of the sea coasts in the summer season of 2023, and the deferred demand for recreation in 2019-2022. For example, traditionally in demand only in winter, mountain resorts are now busy in summer.
- Diversification of the audience: The market situation encourages hoteliers to implement new approaches, offer consumers a variety of service packages, and listen to market needs to implement non-standard solutions. For example, during BlackOut (3-6 hours without central electricity after bombing and missile attacks), hotel rooms and tables in restaurants and conference rooms in suburban complexes serve as offices and coworking spaces, and hotels and suburban complexes in relatively safe Western part regions with access can provide children’s camp and education services.
- Inclusivity: Compliance with the criteria of barrier-free accessibility is becoming a priority for hotels, as it makes them accessible to all people, regardless of their physical abilities. In addition to the worldwide trend for the accessibility index of the hospitality sector, in Ukraine, it is stimulated by the increasing number of disabled guests harmed by attacks, bombings, and fights, either among civilians or militarians.
- Introduction of new technologies: The Ukrainian hotel industry is embracing new technologies to enhance service quality, optimize costs due to the lack of labor, and meet guest expectations. From online registration and mobile keys to smart home management systems, hotels leverage technology to improve the guest experience. Notably, the industry’s rapid adoption of global satellite Internet communication channels like StarLink, solar panels, and generators for uninterrupted power supply and mobile communication support is a testament to its commitment to providing qualitative service even in wartime.
- Development of new formats: There is a growing demand for Aparthotels and service apartments that offer comfortable accommodations with a kitchen and additional services. This demand is caused by the trend of big house losses and internal migration when families are not able to purchase new flats or houses and prefer to rent them until the situation stabilizes and the war ends.
In the context of adapting to the realities of today and searching for new opportunities, the Ukrainian Hotel and Resort Association (UHRA) is actively looking for new partners among online booking systems, tour operators, and other distribution channels. These partnerships allow UHRA member hotels to access a broader range of potential customers and distribution channels to expand their offer and offer customers more options. In particular, the following developments and partnership agreements were reached:
- TrustYou Gmbh: A memorandum of cooperation was signed, under which TrustYou Gmbh provides UHRA members with special pricing on its services. The service offers a comprehensive reputation management solution that helps hotels collect and analyze customer feedback. It has the incredible advantage of integrating AI into the processing of reviews and the formation of responses.
- Booking and Hotelbeds: The largest B2C and B2B distribution channels supported the Ukrainian hotel market and participated in the Cold Start-3 training seminar organized by UHRA.
- Association of Incoming Tour Operators of Ukraine (AITOU): A Memorandum (Manifesto) was signed between AITO, DART, and UHRA on prioritizing the tourism industry in Ukraine’s reconstruction and development strategy and broad mutually beneficial cooperation aimed at supporting and restoring the competitiveness of small and medium-sized enterprises in the industry. A joint project, the All-Ukrainian Survey of Tourism Businesses, has been launched. This survey will collect information on the impact of the war on various segments of the tourism industry (accommodation facilities, tour operators and agents, catering establishments, tour bureaus/guides), as well as analyze and develop joint steps to preserve and support the hospitality industry.
- STR: the world leader in market analytics and the most potent benchmarking tool in the hospitality industry. The parties agreed to support small hotels and that STR would provide analytical data to the Association and connect Ukrainian hotels to its platform free of charge for one year. More than 30 hotels have already taken advantage of this opportunity.
- BookLogic: During the negotiations, BookLogic agreed to provide UHRA member hotels with exclusive terms for its services, including a free Maxi Channel manager for 2-3 sales channels for up to 2 years, the creation of a hotel website on a complimentary basis, the provision of a CMS (content management system), and a booking system on commission basis.
- Light House: This benchmarking tool will provide the Association with business intelligence on the state of the hotel market, which it will share with its members. Thanks to such tools, Ukrainian hotels can analyze their business strategies as part of the global market, look for solutions based on market demand, and formulate tariff policies based on competitive opportunities.
- Room I Room is a global marketplace featuring more than 50,000 hotels worldwide for travel agencies to book their services. A memorandum of cooperation was signed, and Room I Room entered the Ukrainian market, under which it will effectively promote Ukrainian hotels on its platform.
- Visit Ukraine: a service portal about Ukraine that has started developing a new area of its business – distribution of hotel services in the B2C segment. The parties agreed on mutual media support and the development of domestic tourism through the Ukrainian hotel booking platform on Visit Ukraine.
- GO GLOBAL TRAVEL: An international company that provides tourism and travel services for more than 1 million hotels in 70 thousand locations worldwide. The company’s core business includes an online booking system for hotels, travel agencies, tour operators, and other travel industry professionals. Negotiations are underway to bring the global operator back to the Ukrainian market and restore inbound tourism, which was closed with the start of the full-scale invasion.
It is important to note that the Ukrainian Hotel and Resort Association (UHRA):
- Actively cooperates with government agencies, specialized associations, and international partners to promote the development of the Ukrainian hotel market.
- Conducts training seminars, webinars, and other events to help hotels adapt to new conditions and increase their competitiveness.
- Works on collecting and analyzing data on the state of the hotel market, which will help to understand its needs and development trends better.
Overall, Ukraine’s hotel market is experiencing a challenging but exciting period. Thanks to the resilience of Ukrainian businesses, adaptability, and innovative approaches, the hotel industry has every chance to recover and reach a new level of development after the war ends.
