Europe -  St Petersburg

St. Petersburg is Russia’s second most important city, after Moscow. The city is mostly a leisure destination with high demand from May to September (with occupancies above 75%), particularly during the White Nights in June, and a low season during the winter months (with occupancy between 40% and 50% from November to March). St. Petersburg is one of the hubs for large government-driven international events. The city is also expected to benefit from the FIFA World Cup in June and July, hosting seven matches including the third-place final.

Thanks to the combination of a recovery in oil prices, monetary easing and a continued strengthening ruble, there is light at the end of the tunnel for the Russian economy. Impressive tourism arrival growth over the last year (25%) was driven by an improved confidence in the domestic market as well as the cheaper ruble. Chinese tourists also continue to be one of the key international source markets for the city. Only two new hotels opened in 2017 (the Hilton St. Petersburg Expoforum and the Lotte Hotel St. Petersburg). A balanced mix of domestic and international demand, both business and leisure, enabled hotels to yield higher rates (+20%).

The various upheavals of the country over the last few years have been reflected in the volatility of the RevPAR, which recovered (in euro terms) following the financial crisis in 2010-11, but then declined again with the devaluation of the ruble from 2014 onwards. The last two years, however, have seen impressive average rate growth resulting in double-digit RevPAR growth in both rubles and international currencies.

Hotel transactions in St. Petersburg are limited. The most recent transactions include the purchase of the 137-room W Hotel St. Petersburg by an individual Russian investor for €38.4 million (€281,000 per room) in February 2016 and the sale of the 221-room Dostoevsky Hotel as part of a four-property portfolio in November 2016 for an undisclosed sum. Although a number of development sites transacted in 2017, there were no hotel transactions.

Overall, 2017 has shown that the Russian hotel market is back on track and, with the FIFA World Cup on the horizon, the city’s hotels have another good year ahead of them.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

St Petersburg RevPAR Change (€Euro)

St Petersburg RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Simon Hulten
[email protected]
  • +44 020 7878-7775 (w)