Almaty’s hotel rush: How the city is trying to address the booming tourism

Over the first 11 months of the year, Almaty hotels reported more than $133 million in revenue, marking a 28% increase compared to the same period last year and a threefold surge compared to pre-pandemic levels. The increased financial indicators have attracted new investors to the industry, and Almaty’s hotel capacity is now expected to grow by one-third by 2027.

Photo by Ilya Kim

«For the third year in a row, Almaty has been experiencing a severe lack of hotel rooms. Accommodating groups of tourists during peak season has become a big challenge. For example, 22 businessmen who arrived in Almaty in October to attend a trade fair couldn’t find available rooms in the city and were compelled to stay at an inn near a casino in the town of Konayev,» said Aleksandr Aknazarov, a representative of the Kazakhstan Association of Hotels and Restaurants (KAGIR).

The hotel occupancy rate and accommodation fees in Almaty are the highest in Kazakhstan. Over the first three quarters of 2024, four-star hotels reported an average occupancy rate of 65.4%, with accommodation fees averaging $75 per night. For five-star hotels, where the average fee is $150 per night, the occupancy rate reached 70.3%, compared to the national average of 52.5%. During the peak season, Almaty’s occupancy rate climbed as high as 90%.

In 2021, hotel revenue nearly returned to pre-pandemic levels, reaching $53.53 million for the year. In 2022, revenue more than doubled, climbing to $107.47 million. In 2023, it gained another 50%, making $142 million. This year is likely to hit a new all-time high with revenue over the first nine months already surpassing last year’s total by 28%.

«An extensive inflow of tourists and a relatively small number of hotel rooms available in Almaty drive up key parameters such as occupancy, accommodation prices and profitability. Accommodation facilities in Almaty report a higher occupancy rate than their peers in Moscow (65%). According to my observations, the hotel fees are about twice as high,» said Evgeniy Bumagin, CEO of IBC Real Estate in Kazakhstan.

Why does Almaty need more hotels?

According to Kazakhstan’s Bureau of National Statistics, there are roughly 370 hotels in Almaty with 11,500 rooms, capable of accommodating 22,300 people. Of these, only 22 are four- and five-star hotels, offering 2,700 rooms with a capacity of 4,400 guests. However, the Almaty Business Development Company — an enterprise responsible for developing and enhancing the city’s business climate — reports a need for the capacity to host 45,000 guests at the same time.

In 2023, the hotel room stock saw a modest increase of 161 rooms. The largest project was the Grand Mildom on Dostyk Avenue near the Dostyk Plaza shopping center, which added 112 rooms. Other projects were significantly smaller and had minimal impact on overall hotel capacity. These include the Dami Hotel (20 rooms) in the Gorniy Gigant district, 16 bungalows at the Qazaq Auyl Eco Hotel near the Medeu skating rink and 13 seasonal glamping sites around the Shymbulak base station.

However, the city’s administration has pledged to increase the number of hotel rooms by 3,300 in 23 hotels over the period between 2024 and 2027. Nearly a third of the new stock — over 1,000 rooms in seven hotels — was planned for completion this year. So far, only Park Dedeman Almaty has opened its doors., This nine-story, four-star hotel featuring 133 rooms, is located near Atakent Mall on Temiryazev Street, surrounded by three- and four-story residential buildings. According to Dedeman Hotels & Resorts International, headquartered in Turkey, the project was delivered in collaboration with DO-Kar Tourism and RAMS Global. The city’s administration reported that investments in the construction reached $7.64 million.

If all the proposed projects for the period between 2024 and 2027 are implemented, this volume will cover only one-fourth of the demand, enlarging the hotel room stock by approximately 6,000 beds. Nevertheless, it would still be an impressive figure, accounting for more than a third of the current room stock available in Almaty.

In their new projects, developers are increasingly incorporating hotels into a variety of facilities. On the Almaty City Council website, you can find multi-use centers with hotel sections, as well as hostels and apartments within regular residential complexes. Additionally, there are high- and low-rise hotel buildings within residential areas, boutique hotels, glamping sites, eco-homes, guesthouses and tourist camps in the mountains.  

Functions are never too much

«The most important thing is to have a dream. We have a new one. To create a hanging garden on the sixth level for guests and an internal plaza for residents in our new hotel in our favorite city,» Anatoliy Pobiyakho, founder of Line Group (which manages Villa Dei Fiori, Peppoli restaurants and the Line Brew chain) wrote on Instagram a year ago. In November 2023, his multi-use complex project, featuring a boutique hotel, business center and a functioning green roof, was approved by the Almaty City Council. The building’s design was likely prepared by the Turkish firm Büro Istanbul, as a rendering of the project is available on their website. The complex is planned for construction on the site of the Star Business Center, built in 2013, located behind the French House. However, as of now, there are no visible signs of active reconstruction at the site. According to some market participants familiar with the situation, the project is still in the validation and approval stage.

Another multi-use building featuring a hotel is being developed by Saba Group at the intersection of Manas and Satpayev Streets. Initially planned as a high-rise apartment hotel, the project has since been revised. According to the company’s website, the new concept envisions a five-story Class A business center with a rooftop terrace called Saba Tower. However, the hotel component has never been given up. The project description indicates that the complex will integrate commercial, office and hotel spaces. The building frame has already been completed up to the third floor.

The multi-use CFC Capital Financial Center is set to be constructed across the street from the Nur-Mubarak Mosque on Al-Farabi Avenue. The project received approval from the Almaty City Council in May 2024. According to details on the Etnomura Group’s website, the 6.5-hectare site will feature low-rise Class A office buildings, a shopping center, a residential complex, restaurants, a gym and, of course, a hotel. While the construction site is already enclosed by fencing, no active construction work could be observed so far.

A slightly different story is a project located at 140 Al-Farabi Avenue, just east of the previously mentioned site. According to the construction site billboard, Sensata Construction is currently building the Hilton Garden Inn hotel compound, with a planned commissioning deadline in Q3 of 2025. The project received endorsement from the Almaty City Council in February 2024. As of now, the building frame has been completed.

Apartments with all amenities

Radisson Hotel & Residences Almaty is another prominent project in the city, managed by an international hotel operator. In early August, Radisson Hotel Group announced the signing of an agreement with Kazakhstan Upstate LLP, a part of Everest Development, to develop a property featuring 156 rooms and residences in downtown Almaty.

Radisson’s debut project in Almaty is under construction at the intersection of Pushkin and Makatayev Streets, across from the Green Bazaar. Two 12-story and 16-story towers and several low-rise commercial buildings will replace a Soviet-era hotel. According to the developer’s sales office, the first two floors of the 12-story tower will house office spaces, while the remaining floors will consist of 125 serviced apartments, currently marketed under the Turkistan Apartments brand. The second tower will be entirely dedicated to the hotel. Radisson says that its new hotel will feature design inspired by Scandinavian traditions, and a sky bar with panoramic views. While sales managers claim the facility will be ready by late 2025, Radisson Hotel Group is more cautious setting the construction deadline for early 2027.

Another apartment hotel under review is MegaView Living, located in the Mega Park area and developed by The Ultimate Visionary Group. This 14-story building is expected to house 340 apartment units between the 3rd and 12th floors. The ground floors will accommodate two coworking spaces, a conference hall, a restaurant and a coffee shop. Office spaces will occupy the 13th floor, while the top floor will serve as an event hall. The project is at its groundwork stage, and the developer promises to complete the construction by 2026. MegaView Living is the second apartment hotel project by The Ultimate Visionary Group. Previously, the company announced Parkside Living, an apartment hotel with 360 rooms situated near the Almaty Central Recreation Park, scheduled for completion in the first quarter of 2025.

The most recently announced apartment hotel project is an object called Presidential Library, located at the intersection of Nazarbayev Avenue and Satpayev Street at the site of the former military hospital. The project proponent is INK Architects and the developer is Qazaq Stroy. According to the project, 16,000 square meters will be dedicated to a library, 12,600 square meters to a business center, 9,200 square meters to a business hub, 10,100 square meters to 49 apartment units and another 9,700 square meters to the hotel. The expected construction finishing date is late 2025.

Mountain huts

At the site of the demolished Soviet-era Medeo Hotel in the Medeu skating rink area, construction is underway for the three-story Medeu Park Hotel. This boutique hotel will include apartment units, restaurants, a swimming pool and a spa facility. The hotel was initially scheduled to open in late 2022 but the deadline was moved because the construction company behind the project — Medeu Park Hotel LLP — failed to secure funding from the Development Bank of Kazakhstan that year. Additionally, Kairat Boranbayev, a prominent businessman and owner of the project, was arrested and later convicted on multiple criminal charges. The project resumed only after Boranbayev’s prison sentence was replaced with parole. Fit-out work is currently in progress in one of the building’s blocks.

Located 80 meters from the Small Almaty River, along Kerey and Zhanibek Khans Street and across from the Samal restaurant, a two-story building qualified as a public service facility was announced to be constructed. The planned development includes guest houses built from structural insulated panels and a bathhouse complex. The project’s general designer is Landmark Project, while the originator is Sagiyatulla Sarsenov, a former board member of the Astana EXPO-2017 National Company, ex-chair of the Ile Corporation and a three-time candidate for the Mazhilis, Kazakhstan’s lower house of Parliament. Sarsenov acquired the land for this project in two parts: one half was purchased two years ago from the Ile Corporation for approximately $957,306, and the other half was gifted this year by Aigerim Sharipbek, Kazakhstani opera singer and actress. The project is set to commence in 2025.