Market Survey

Comparison of comparable daily rental rate of  our apartments vs. local hotels in Odessa

The graph above shows the average daily price of most hotels in Odessa before hotel taxes.  Odessa Realty Group offers comparable accommodations for 62% less than the average hotel price.  Our apartments are more spacious, all are centrally located and equipped with a full kitchen.

The apartment rentals are calculated for 2007 using the following:

Daily rent for 1-bedroom is $135

Daily rent for 2-bedroom is $165

Private apartment rentals are common for tourists to Odessa.  Currently there is a limited network of rental agents that contract with owner to provide private accommodations for tourists.  As owners of apartments, we are able to price our units competitively and offer a better value to tourists.  In addition, we supply units to these local rental agents.  This combination of being owner and supplier allows us to have lower prices and stronger demand which maximize revenue for our shareholders. 

Tourism in Ukraine

Tourism in Ukraine is rising steadily.  According to Ukraine's State Tourism Administration, in 2005, 17.6 million tourists visited Ukraine.  This represents a 13% increase from 2004, or an additional 3.1 million visitors.  This trend is expected to continue, with a projected 19.6 million visitors expected in 2006.  According to industry experts and tourism agencies growth in 2005 was due to Ukraine's abolition of its visa regime with neighboring EU countries, the USA and other countries.  The Orange Revolution and Eurovision-2005 were factors for the tourist infrastructure improvements, which support the projections for continued increasing tourism to Ukraine in the future.

City of Odessa

Location

The Odessa's region is located in the south of Ukraine and borders on Moldova and Romania. Odessa's region is largest in Ukraine: its total area is 33,300 square kilometeres (an approximate size of Belgium or the Netherlands) which is about 5.5% of Ukraine's territory.

The coastline position of the region is important for the economy. Sea and river ports of the region are situated at the junction of intensive international transport flows. There are freshwater lakes Kagul, Yalpug, Katlabuh, and the salt lakes - Sassyk, Alibey, Burnas, Budatskos, Shagani, estuaries Khadjibeevskiy, Kuyalnitskiy famous for their curative muds.

The City of Odessa is situated on terraced hills overlooking Odessa Bay, an inlet of the Black Sea that forms a natural harbor. The city is among the largest in Ukraine. It is an important transportation, industrial, agricultural, scientific, cultural, and resorts center, with a population of 1,012,900 (January 1, 2004).

Climate

Odessa has a relatively warm, dry climate, with January temperatures averaging -2 C (28.4 F) and July temperatures, 22 C (71.6 F). Annual precipitation totals 350 mm. The mild climate and coastal lagoons have given rise to beach resorts and spas famous for therapeutic mud baths. Today numerous recreational resorts and spas are situated along a 50-mile stretch of Odessa's coast. These facilities attract hundreds of thousands of visitors every year.

Natural resources

Distinctive features of the regional natural resources are the favorable climate, the sea, curative mud and salted water of the estuaries, sand beaches, and mineral water springs. The natural conditions are favorable for cultivation of winter wheat, corn, barley, soy, millet, and sunflowers.

Population

Odessa's region consists of 26 rural districts, with 19 cities, 33 towns, and 1,139 villages. On January 1, 2004, the population of Odessa and the surrounding environs was 2,430,033.

Odessa's region has a much more mixed population in terms of nationality, compared to other regions in Ukraine. 133 nationalities reside here, and non-Ukrainian residents make up more than 37% of the regional population. The main national groups are: Ukrainians (62.8 %), Russians (20.7 %), Bulgarians (6.1 %), Moldovans (5.0 %), Jews (0.55 %), Belorussians (0.52 %), Armenians (0.30 %), Georgians (0.11 %), Poles (0.13 %), Germans (0.12 %), and Greeks (0.08 %).

Odessa has 1,185 streets, 62,001 buildings, 10 hotels, 12 national universities, 34 educational institutions, 88 recreational resorts and 20 museums.

Public transportation in Odessa city includes 21 tram routes, 15 trolley bus routes, 47 bus routes and 35 minibus routes.

Economy and investment policy in Odessa region

Odessa's region is one of the most attractive regions in Ukraine for foreign investors.  The total sum of foreign investments is $ 383.2M.  The majority is direct foreign investments (DFI) with about $ 369.2M - (96.3 % of total)  invested into 574 enterprises in the Odessa's region.

Portfolio investments in 34 enterprises are $ 4.1M. (1.1 % of DFI total ), other foreign investments are financial leasing, short- and long-term cash loans - $ 9.9M. (2.6 %).

In 2003, 100 enterprises of the region received $ 98.1M investments. The total value of foreign investments increased by $ 78.1M; it was 28.3 % more than in 2002. The main  investments were made into equipment and real estate ($ 40.7M) and  finance payments ($ 24.4M).

Today the principals of regional foreign investment enterprises are companies from 62 foreign countries. The major foreign investors in the region are:

Virgin Islands (Great Britain) - $ 90.1M (24.4 % of total FDI),

The USA $ 58.6M (15.9 %),

Cyprus - $ 45.8M (12.4 %),

United Kingdom - $ 38.7M (10.5 %),

Monaco - $ 19.6M (5.3 %),

Switzerland - $ 18.1M (4.9 %),

Liechtenstein - $ 12.1M (3,3 %),

Moldova - $ 10.6M (2.9 %),

Germany - $ 9.2M (2.5 %).

In 2003, the foreign investments were distributed to the following sectors of the regional economy:

food and food processing industry $ 6.2M,

trade - $ 2.0M,

transport facilities, cargo reloading in regional ports - $ 17.2M,

finance consulting and other commercial services - $ 3.3M,

construction activities - $ 1.6M, industry (without food industry) - $ 3.0M,

oil refinery $ 12.0M,

tourism & recreation sector - $ 2.2M.

References

1. Odessa Region Profile. From official site of the Mission of Ukraine to European Communities: http://www.ukraine-eu.mfa.gov.ua/
2. Odessa, The atlas. Reference cartographic publication.
3. Barbara Peitsch. Investment in Ukraine. The OECD OBSERVER, No 204