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.

As a host city to several World Cup games, including the third-place match between England and Belgium, St. Petersburg also benefitted from the boom in tourism from the tournament, albeit not to the same extent as Moscow. International passenger traffic to Pulkovo Airport saw record passenger numbers, with total traffic growing by 12% over 2017 (which in turn was 13% higher than the previous peak in 2014). Curiously, this did not translate into additional roomnights and occupancy was down in both June and July, and the city finished 2018 down almost two percentage points in occupancy compared to 2017. World Cup visitors were more rate-sensitive in St. Petersburg than they appear to have been in Moscow, and the usual leisure demand that travels to the city for its ‘white nights’ were put off by the high rates and worries over how busy the city would be. Fortunately, the high rates achieved during the World Cup helped the city to achieve ADR growth of over 20% in 2018 compared to 2017 (in rubles). 

Due to the volatility of the ruble, the implications of the exchange rate fluctuations in 2018 must also be considered. While St. Petersburg achieved impressive growth in average rates, it did not achieve the extremely high growth of Moscow. The drop in the value of the ruble therefore had a greater impact on the city and cut growth from over 20% in rubles to under 10% when viewed in euros. That said, the St. Petersburg hotel market still had an excellent year.

Hotel transactions in St. Petersburg continue to be 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, the sale of the 273-room Courtyard by Marriott Pushkin Hotel for €28.7 million (€105,000 per room) in February 2018 and the sale of the 279-room Karelia Hotel for an undisclosed amount in September 2018. LVMH also announced its intention to purchase the Belmond group, of which the Belmond Grand Hotel Europe is a part, in December. The deal is expected to close mid-2019.

While not quite the resounding success that Moscow achieved, St. Petersburg finished 2018 strongly. Given the very limited pipeline of new supply, if existing hotels are able to recover from the small drop in occupancy and maintain some of the rate growth of 2018, then 2019 should also prove to be a good year.

Overall, hotel values in St. Petersburg increased by 6.3% in terms of euro in 2018 (19.6% in local currency).

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)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)