Europe -  St Petersburg

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The 2022 European Hotel Valuation Index is intended as a reflection of the hotel performance of the previous year. As such, the below overview of the St. Petersburg market covers only up until the end of 2021, and changes in value represent the observed movements from 2020 to 2021. Russia’s invasion of Ukraine and the subsequent political and economic sanctions will undoubtedly have a significant impact on performance and hotel values in the short and medium terms but have not been factored into our value estimates as of the end of 2021. 

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 75.0%) in a normal year, particularly during the ‘white nights’ in June, and a low season during the winter months (with occupancy between 40.0% and 50.0% from November to March). St. Petersburg is one of the hubs for large, government-driven international events.

In 2018, as a host city for 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 room nights and occupancy was down in both June and July, with the city finishing 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 20.0% (in rubles) in 2018 compared to 2017. The publicity during 2018 appears to have had a lasting impact, with the city achieving a more than 10.0% 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 25.0% (local currency), resulting in a RevPAR drop of more than 70.0%, 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 75.0%.

In 2021, St. Petersburg saw an exemplary recovery, with occupancy above 40.0%, one of the best of the major European cities. The annual performance was bolstered by the International Economic Forum (SPIEF) which was one of the first major face-to-face events to take place since the onset of the pandemic. The event was attended by more than 13,500 participants from 141 countries over four days in June. Both occupancy and average rates were nearly double 2020 levels in that month and while occupancy and RevPAR were still below 2019 levels, it is worth noting that ADR was significantly above that of June 2019. 2021 average rates finished the year around 50.0% above 2020, both in local currency and euro. This represents almost a 10.0% increase over 2019 levels, in rubles, but due to the less favourable exchange rate compared to 2019, close to a 10.0% decline in euro. Overall, hotel values in St. Petersburg increased by 6.3% in terms of euro in 2021 (12.5% in local currency).

There were few new openings in 2021, the most notable being the independent Wawelberg Hotel, a 78-room luxury property in the city centre. Looking forward, there are more than 6,800 rooms in the pipeline. However, these rooms are spread across just 13 properties. More than half have over 400 rooms, and the proposed Aparthotel Pro.Molodost alone will have over 2,000 rooms. Transactions were similarly limited, with only two occurring that we are aware of: the Crowne Plaza AirportCity, part of a three-property portfolio that transacted for an undisclosed amount, and the Courtyard by Marriott Vasilievsky, which transacted for a rumoured €19 million (€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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
Senior Director
[email protected]
  • +44 20 7878 7722 (w)
  • +44 0 7725781037 (m)