Europe -  St Petersburg, Russia

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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%) in a normal year, 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.

In 2018, as a host city to several World Cup games St. Petersburg also benefitted from the boom in tourism from the tournament, albeit not to the same extent as Moscow. 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). The publicity during 2018 appears to have had a lasting impact with the city achieving a more than 10% increase in occupancy and a relatively minor correction in rate, resulting in positive RevPAR growth in both rubles and euro, an impressive achievement for a year following the hosting of a World Cup. 

Unfortunately, as with the rest of the world COVID-19 brought an abrupt halt to these gains. While GDP declined by only 3.1%, significant but relatively modest compared to many European countries, the hospitality industry was hit hard. Demand was less than half of 2019 levels and average rates dropped by more than 25% (local currency), resulting in a RevPAR drop of more than 70%, significantly worse than Russia overall but more or less in line with the European average. It should also be noted that the decline in the value of the ruble in 2020 compounded the negative impact and, when viewed in terms of euro, the decline in RevPAR was closer to 75%.

While the top line performance was no worse and no better than most European cities, the bad news and reason for the significant value declines is the lack of support available to hoteliers. The availability of government subsidies, furlough schemes and other support was far more limited than most other markets, meaning hoteliers took the brunt of the COVID-19 impact. Overall, hotel values in St. Petersburg declined by 22.1% in terms of euro in 2020 (11.6% in local currency).

There were no new openings and virtually no major transactions in 2020. The only disclosed transaction was the 114-room Park-Otel Potemkin, a countryside hotel located south of the city, for €36,000 per key. The Courtyard by Marriott Vasilievsky is also worth noting, although the transaction did not complete until February 2021. The 214-room hotel was sold for approximately €89,000 per key.

Change In Value For Market: (€Euro)

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%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)