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News Release

​St. Petersburg

St. Petersburg Hotel Market Update. Q1 2015 Results


​​St. Petersburg, 27 April, 2015 – JLL Hotels & Hospitality Group announces the Q1 2015 St. Petersburg hotel market results.

There has been some good news coming out of the St. Petersburg hotel market. Having survived a tough 2014 by a boost in local tourist demand we have seen yet more evidence of this in quarter one of this year. The city, as a whole, is up 16% RevPAR on the same 3 month period last year.

"Breaking it down into the segments, each one managed to increase RevPAR in the first quarter – more so in the upscale to luxury segments. We have seen hotels that are more focused on international corporate demand struggling whilst those that have been able to tap into local and Asian tourism have flourished. We also hear that the upper tier hotels had particularly successful holiday periods in January (New Year), February (Man's day) and March (Ladies Day)." - David Jenkins, Head of JLL Hotels & Hospitality Group, Russia & CIS, said.

The Four Seasons is helping to drive ADR in the luxury segment, though not to get too carried away as the segment ADR for Q1 was RUB 9,500 (at 38% occupancy) compared to RUB 15,000 (at 50%) in Moscow. So any growth starts from a low base – but growth is good.

Q1 2014 saw a drop in city occupancy – it was felt that Sochi had been dragging focus away so this growth is also partly as a result of the city coming out of the shadows. Since February there are now 9 daily Sapsan trains going to St. Petersburg from Moscow – this is also being reflected in hotel occupancy growth. Trains are also quite a bit cheaper than before given the large increase of available seats.

With few, if any, significant new hotels expected to open this year, the city has a chance to drive demand and capitalise on the increased desire for domestic tourism. This is anyway (no matter how it came about) a positive sign for a city that has struggled to grow quality domestic tourism – a city that for years has simply been a destination for occasional weekend breaks and school groups (as far as domestic tourism goes).

"Most of the growth in the international hotels has come via occupancy, with the boost in domestic demand not enabling hotels to increase prices. The main increase in rate has come in the luxury segment (up 8%) and we have also seen midscale and economy hotels boosting rates slightly too." – David Jenkins commented. – The second quarter is especially important for the city's hotels as it covers the period of April to June – with the May holidays and the White Nights month of June, which also is the month for the Economic Forum. This second quarter typically makes or breaks the year for the hotels."

St. Petersburg Hotel Market in details

Luxury

The luxury segment has seen a growth of 21% RevPAR in Q1, coming from an increase of 8% ADR and 13% occupancy. "It is the second straight year of growth in Q1 in both rate and occupancy and a reflection of the quality of the hotels in the city within this segment. Still, the main issue for investors is that RevPAR is still far lower than in Moscow (about 2 times lower)." – David Jenkins noted. – "Still, the trend is positive and highlights the ability to tap into domestic demand that is unable or unwilling to travel abroad."

Q1 2015 St. Petersburg Luxury Segment

Source: STR Global, JLL033.png

Upper Upscale

An excellent 31% growth in RevPAR is a highly encouraging start to the year – coming mostly from a 29% rise in occupancy. It is still only 45% occupancy overall for the quarter but certainly demand for these hotels is out there, and the hotels in this segment are still extremely well located, in the historical centre so highly appealing for tourists.

Q1 2015 St. Petersburg Upper Upscale Segment

Source: STR Global, JLL035.png

 

Upscale

This segment has also seen a 31% growth in RevPAR in Q1, coming also from an occupancy boost of 32% and a slight dip in rate. This is a truly excellent result and the hope is that the hotels can continue to drive occupancy for the second quarter too.

Q1 2015 St. Petersburg Upscale Segment

Source: STR Global, JLL035.png

Upper Midscale

A 4% rise in RevPAR is far more modest than in the 3 upper tiers but it is still a growth, coming all in occupancy. Clearly there is little ability to drive rate in such hotels but any increase in domestic tourism will help this segment – at the right price point.

Q1 2015 St. Petersburg Upper Midscale Segment

Source: STR Global, JLL036.png

 

 

Midscale

These hotels have also grown by 4% in RevPAR this first quarter, though all coming in rate growth rather than by occupancy.

Q1 2015 St. Petersburg Midscale Segment

Source: STR Global, JLL037.png