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Hospitality Sector in St. Petersburg

2012

St. PetersburgGovernment

Saint-Petersburg

20,577

1,439 km

million dollars

million dollars32,656FDI:

million dollars 1,074.1

4,953.2

59.543,442 people/km

Territory:

Population:

GRP:

Export:

Import:

Capital investment:

billion dollars

thousand people

9,118

12.02 thousand dollars per person

million dollars

| 54Hospitality Sector in St. Petersburg

Introduction

St. Petersburg is one of the major tourist destinations Europe combining the rich cultural and historical heritage and the image of the growing conference and exhibition centre.

In 2011, about 5.5 million tourists came to St. Petersburg alone in 2011, which is by 8% more than in 2010.

According to a forecast made by the World Tourism Organization, if the Russian Federation offers a well-developed and modern tourist infrastructure, the number of foreign visitors to the country may reach 40 million per year. Potentially, by 2020 Russia can enter the top ten tourist destinations of the world.

In 2004 the City of St. Petersburg launched the Hotel Infrastructure Development Programme with the status of a strategic municipal investment project. Each hotel developer is individually supported by the Committee for Investment and Strategic Projects (CISP) of the City Administration at all stages of project implementation, and this effective support greatly contributes to the speed of new hotel completion.

As a result of this, the number of hotel rooms available to the visitors grows fast. In 2004 there were 550 hotels in St. Petersburg with the number of rooms and suites totalling 23,000. In 2011, these numbers grew to 687 hotels (a 25% increase) and 33,734 rooms.

Additionally, over the last several years St. Petersburg welcomed such major international hotel operators as Kempinski, Corinthia, ACCOR (Novotel and IBIS brands), Rezidor SAS (Radisson SAS and Park Inn brands), Sokos Hotel, Marriott (Courtyard by Marriott brand), Reval Hotelligrupр, Starwood (W brand), Four Seasons Hotels & Resorts and a number of others.

The premium quality of the city’s hotels is also confirmed by a number of international organizations. Thus, the major international travel website TripAdvisor included 10 St. Petersburg hotels in the list of 20 top Russian hotels.

Contents

1. Hospitality Sector in St. Petersburg

2. Incoming Foreign Visitors

3. Key Hospitality Sector Indicators

4. Hotel Market in St. Petersburg

5. Hospitality Sector Employees

6. Legal Regulation of the Hospitality Sector

7. Foreign Hotel Operators in St. Petersburg

6

8

12

16

19

20

21



Hotel Capacity in St. Petersburg

The study carried out by the Committee for Investment and Strategic Projects demonstrated that there are 643 hotels in St. Petersburg with the total of 27,931 rooms and suites. With the addition of resorts and spas, this number increases to 33, 734 rooms (687 hospitality facilities).

Due to the active involvement of the city authorities, the number of hotel rooms grew by about 1,000 per year since 2008:

Hotel Market Segmentation by Hotel Class

The majority of hotel rooms in St. Petersburg in 2011 were provided in 3-star and 4-star hotels (61% or 159 facilities), then follow 2-star hotels (17% or 130 facilities), mini hotels (9% or 271 facilities) and 5-star hotels (9% or 13 facilities).

11.1

1.3

1.2 Hotels Commissioned into Operation in 2011

1. 61-63 Ligovsky Prospekt, Crowne Plaza St. Petersburg Ligovsky (206 rooms, 4*), brand – Crown Plaza, operator – Intercontinental Hotels Group, investor – OOO Desna Development

2. 6 Voznesensky Prospekt, W St. Petersburg , (137 rooms, 5*), brand – W, operator – Starwood Hotels & Resorts, investor – OOO R.E.D.

3. 44 Ulitsa Vosstaniya, Demetra Art House, (60 rooms, 4*), brand – Demetra Art House, operator – Demetra.

4. 37 Bolshoy Prospekt (Petrogradskaya Storona), Vvedensky Hotel, (160 rooms, 4*), brand – Vvedensky, operator – ALROSA Hotels

5. 1 Voznesensky Prospekt, House with Lions, (186 rooms, 5*), operator – Four Seasons Hotels & Resorts

6. 6 Pulkovskoye Shosse (294 rooms, 4*), brand - Crown Plaza Pulkovskaya, operator – IHG (opened on 20 December 2011)

7. 2A Rasstannaya Ulitsa, Bristol Hotel (120 rooms, 3*), investor – OOO Bolshoy Prospekt (opened on 21 December 2011)


Source: CISP

Source: CISP

0

200

400

600

800

1000

1200

1400

1600

2006 2007 2008 2009 2010 2011

153 52

4

1265 14

02

1165

1163

Source: CISP

Source: CISP

0

2006 2007 2008 2009 2010 2011

5

10

15

20

25

30

35

9 9

7

35

22

7

New Hotels (2006–2011)New Hotel Rooms (2006–2011)

The implementation of the Hotel Infrastructure Development Programme facilitated steady annual growth in the number of new hotels and hotel rooms: 153 rooms in 2006, 524 rooms in 2007, 1,295 rooms in 2008, 1402 rooms in 2009, 1165 rooms in 2010, and 1163 rooms in 2011.

The new hotels comply with the highest international standards, and some of them are managed by major international operators, including Kempinski, Corinthia, ACCOR, Rezidor SAS, Sokos Hotel and others.

Hotel Market Segmentation by Hotel Class

271 42% Mini Hotels130 20% Two stars116 18% Three stars70 11% One star43 7% Four stars13 2% Five stars

9159 33% Three stars 8128 29% Four stars4887 17% Two stars2407 9% Mini Hotels2374 9% Five stars976 3% One star

Hotel Room Distribution by Hotel Class


It should be noted that there are certain disproportions in the distribution of hotels by city district. Most hotels, including five-star and four-star hotels, are located in the Central District of St. Petersburg .

Following the Central District in 2011 were Kurortny, Admiralteisky, Vasileostrovsky and Moskovsky districts.

Central 25.7

Kurortny 18.1

Admiralteisky 10.4

Vasileostrovsky 9.1

Moskovsky 8.7

Vyborgsky 4.3

Petrodvortsovy 3.8

Petrogradsky 2.9

Krasnogvardeisky 2.8

Primorsky 2.6

Kalininsky 2.3

Frunzensky 2.1

Nevsky 1.9

Krasnoselsky 1.7

Pushkinsky 1.6

Kirovsky 1.5

Kolpinsky 0.4

Kronshtadsky 0.1

Distribution of Hotel Rooms by City Districts in 2011 (%)

In order to provide for success, the development of the hotel infrastructure must be accompanied by the improvement of tourist services, including easy and comfortable transport access to the city.

One of the key entry gates to the city is Pulkovo Airport. In 2010, the project was launched with the aim of establishing it as a major international air hub. By 2039, its passenger throughput capacity will grow to 35 million passengers per year, which will provide for accommodating new visitors and opening new domestic and international air destinations. Additionally, this project envisages the development of divers support infrastructure, including business and commercial facilities. The total cost of the project will be over 47 billion rubles.

During the first half of 2012, the number of passengers in Pulkovo Airport grew by 18.5% compared to the same period of 2011 to 4,898,182 people.

During the same period, the number of international passengers (including CIS countries) grew by 23.4% to 2,607,944 people.

The number of domestic passengers grew by 13.3% to 2,290,238 people.

The number of landings/takeoffs increased by 11.2% and reached 58,915. The total takeoff weight reached 1, 934,469 tons, which is 12.8% more than in the same period of 2011.

The main increase of passenger flows was to such international designations as UAE, Egypt and France. Among domestic and CIS destinations the most popular were Moscow, Rostov-on-Don, Ufa and Krasnoyarsk, as well as Minsk, Urgench and Samarkand.

During the 2012 St. Petersburg International Economic Forum, Pulkovo Airport serviced 766 flights, which is 41.3% more than in 2011 (542 flights).

Incoming Foreign Visitors (Air, Road and Sea Transport)

2

Passenger Turnover of Pulkovo Airport (million)

Source: OOO Air Gates of the Northern Capital

0

4

2

6

8

10

20112006 20082004 2007 20092005 2010

4.3

4.7 5.

1

6.1

7.1

6.8

8.4

9.6


In 2010, the new ferry line connecting St. Petersburg and Helsinki contributed greatly to the number of cruise tourists coming to the city.

During the first eight months of 2012, the port welcomed 390,599 passengers (of which 116,243 passengers in August) from 206 sea vessels (including 58 in August).

This was partly due to the active cooperation with the federal bodies of state power resulting in the introduction of the new visa regime: now cruise passengers may stay in the city for 72 hours without a visa.

St. Petersburg is the biggest railway hub in Northwest Russia, and on the national scale is second only to Moscow. It connects Russian Northwest, East and South with Finland and Estonia, and is well connected to the sea routes to Western Europe. On the total, it serves 10 major railway routes serviced by 5 stations.

All railways in St. Petersburg are operated by Oktyabrskaya Railways (branch of OAO Russian Railways).

Sapsan, a high-speed train service, carries passengers between St. Petersburg and Moscow in only 3 hours 45 minutes.

In December 2010, another high-speed railway service, Allegro, was launched between St. Petersburg and Helsinki with the average travel time of about 3 hours 30 minutes.

The Sapsan and Allegro high-speed trains now carry over 7 thousand passengers daily.

The development of the new sea passenger terminal with the total capacity of 1.5 million passengers per year facilitated a significant increase in the number of incoming tourists, as well as provided for inclusion of Northwest Russia into the sea cruise system of the Baltic Sea. The new port comprises four terminals for cruise liners and ferries (317 meters long and 9 deep). The total volume of investment in the project was 26.88 billion rubles.

In 2009 in Hamburg the new port won the Seatrade Europe prize as the Best Transit Port of the Year, and in March 2011 received the Dream World Cruise Destination 2010 prize for the best port facilities.

On 27 May 2011 the port was commissioned into full operation and handed over to the City of St. Petersburg .

St. Petersburg Port: Incoming Passengers and Vessels

Incoming vessels Passengers (thousand)

Source: OOO Sea Facade

0

100

200

300

400

500

20112006 20082007 20092005 2010

324

521.

8

364

300

299

306

274 29

9 317

396

323

428.

5

273 36

4.5

| 1110


400 1200 14001000800 16000 600200

793.4

962.8

892.4

738.2

920.4

Over the recent six years, the number of Russian and foreign hotel guests in St. Petersburg increased in proportion to the growing number of tourists.

Key Hospitality Sector Indicators 3

The decline in the numbers in 2009–2011 can be explained by the monitoring methodology (starting from 2009, small mini hotels have not been included in the statistics).

The number of Russian nationals staying in St. Petersburg hotels is traditionally higher than the number of foreign guests.

Foreign Nationals Russian Nationals

0

0,5

1,0

1,5

2,0

2,5

3,0

20112006 20082007 20092005 2010

2.6 2.

9

1.8 1.9

1.9 2.0 2.1 2.2 2.

3 2.5

2.3 2.

5

2.3

2.8

Incoming Tourists (million)

Source: CISP

Total guests

Total Russian nationals

Total foreign nationals

Leisure

Leisure

334.2

189.6

1.03.3

7.4

1811.3

1017.9

793.4

372.8

185.9

0.65.8

3.4

2255.0

1292.2

962.8

542.9

206.3

7.2

0.2

0.0

0.0

1647.8

892.4

2540.2

309.9

208.4

2.6

2.6

0.0

0.0

1750.6

52.3

78.0

1012.4

738.2

788.0

470.2

298.7

3.9

3.9

0.2

0.0

2024.4

128.1 1234.4

788.0

1501.6

884.7

626.9

440.4

235.3

0.4

0.4

4.5

0.0

171.6

58.2

1501.6

920.4

2422.0

2006

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

1000

400

2000

1200 14001000800 1600

0

0

1500

600

2500500

200

Russian nationals

Foreign nationals

Business and professional

Business and professional

Religious

Religious

Medical and rehabilitation

Medical and rehabilitation

Other

Other

Hotel Accommodation Dynamics (thousand guests)

Source: Petrostat

1017.9

612.5

563.0

1292.2

819.4

643.1

16478

1002.9

517.0

1012.4

566.6

451.8

1234.4

632.0

467.5

Source: Petrostat

Source: Petrostat

Distribution of Visitors Staying in St. Petersburg Hotels by Purpose of Visit (thousand)

Russian Nationals

Foreign Nationals

54.8

40.6

94.8

168.9

66.9

26.17.3

3.2

21.8

In 2011 the majority of Russian visitors to St. Petersburg (884,700 people, or 59%) came to the city for “leisure activities.” There were also 440,400 Russian nationals coming to the city for business and professional reasons, and 4,500 came here for medical or rehabilitation services (steady growth since 2009).

According to the municipal statistics (Petrostat), the majority of foreign nationals (626,900 people, or 68%) came to St. Petersburg as pure tourists, while businessmen and professionals accounted for 25.5% of the total (235,300 people).


1-3 nights

1-3 nights

Russian Nationals

4-7 nights

4-7 nights

8-14 nights

8-14 nights

167.4

138.1

30.7

25.3

9.4

5.0

2.5

2.0

0.1

0.6

0.2

0.3

240.0

182.4

43.0

29.1

7.7

2.1

2.5

1.9

0.2

0.5

1.9

0.5

359.1

283.7

70.3

32.0

9.7

2.4

5.5

2.9

0.2

3.5 0.6

0.4

249.8

141.1

36.9

11.0

13.5

2.3

1.1

1.5

0.0

0.1

1.8

0.4

208.2

100.7

34.2

20.7

16.8

2.7

4.7

1.4

0.1

0.0

1.2

0.7

1162.0

751.2

271.5

140.3

39.5

24.0

12.3

1.7

7.8

1.0

0.4

0.2

5.6

0.3

2006

2006

2007

2007

2008

2008

2009

2009

2010

2010

2011

2011

400

400

1200

1200

1400

1400

1000

1000

800

800

1600

1600

0

0

600

600

200

200

15-28 nights

15–28 nights

92–182 nights

92–182 nights

29–91 nights

29–91 nights

183 nights and above

183 nights and above

807.3

622.1

968.1

659.8

1202.6

567.2

709.2

581.8

967.4

661.5

Distribution of Guests Staying in St. Petersburg Hotels by Length of Stay (thousand)

Foreign Nationals

Source: Petrostat

Source: Petrostat

In 2011, the majority of foreign visitors stayed in St. Petersburg hotels for 1–3 nights (1,162,000 people, or 77.4%), while 271,500 (18%) visitors stayed for 4–7 nights, and 54,600 visitors (4,3%) – for over a week.

According to Petrostat, in 2011 about 751,000 foreign nationals staying in St. Petersburg hotels spent in the city less than 3 days 3 (95% of the total), 140,300 (17,8%) – 4–7 days, and 27,200 (3.5%) – over a week.


0

2009 2010 2011

4 000

2 000

12 000

10 000

8 000

6 000

16 000

14 000

1159

9.0

5918

.0

3036

.0

1449

1.0

6343

.0

3843

.0

1220

4.0

5647

.0

2780

.0

In 2011, the typical level of profitability of operating hotels was 10–15%, while the hotel development projects were more profitable at 15-25%. The construction cost per 1 square meter (excluding the land plot) was 40-60 thousand rubles depending on the building type and characteristics.

Average Cost of Hotel Accommodation (rubles per night)

Profitability of Hotels Development Projects (%)

0

3

6

9

12

15

20112006 20082007 20092004 2005 2010

14.0

13.8

12.5

11.1

13.0

14.0 15

.0

15.0

Source: CISP

Hotel Market in St. Petersburg4In 2006–2007 the St. Petersburg hotels had comparatively high average annual occupancy rates due to the deficit of hotel capacity and the growing number of visitors. The economic crisis first influenced the market by the end of 2008, and was felt by all types of hotels during 2009. In 2010 the best results in this respect were demonstrated by three-star hotels. During the next year the 3–4-star segment was the obvious leader, partly due to the increasing gap in the rates.

5* 4* 3*

5* 4* 3* 5* 4* 3*

5* 4* 3*

The most expensive accommodation was demonstrated by five-star hotels (10,600 rubles per night for a standard two-piece suite in the low season and 18,400 rubles per night in the high season).

0

0 0

2008 2009 2010 2011

2009 2010 2011 2009 2010 2011

20

4 000 4 000

2 000 2 000

40

60

12 000 12 000

10 000 10 000

8 000 8 000

6 000 6 000

80

16 000 16 000

14 000 14 000

100

20 000 20 000

18 000 18 000

49

1366

7.0

1012

1.0

68

7186

.0

5013

.0

3625

.0

2615

.0

60

Average Annual Occupancy Rate in St. Petersburg Hotels by Hotel Type (%)

Source: CISP

Source: CISP Source: CISP

Source: CISP

32

4658.7 52.0

39.042

69.0

56.0

Cost of Hotel Accommodation – High Season (rubles per night)

Cost of Hotel Accommodation – Low Season (rubles per night)

1839

1.0

1059

1.0

7793

.0

4893

.0

4560

.0

3127

.0

1562

4.0

8783

.0

7020

.0

4275

.0

3374

.1

2187

.0


Hospitality Sector Employees

Hospitality Sector Employees 55.1

5.2

According to Petrostat, the average monthly salary of the hospitality and catering sector employees grew by 40% since 2008 and in October 2011 reached 23,720 rubles.

Training of Hospitality Sector Specialists in St. Petersburg

Source: Petrostat

Source: The Committee on science and higher school of St.Petersburg

Average number of employees

Average number of employees (excluding part-time employees)

550 636 1818 2827 998

704 654 1713 2395 10156

708 833 1980 3040 11555

701 858 1528 2883 10220

1182 802 1554 2394 9822

988 799 1383 2409 9658

2006

2007

2008

2009

2010

2011

70002000 40000 3000 50001000 8000 9000 100006000

Administrative

Managerial

Hospitality

Catering

University degree in hospitality management:

St. Petersburg State University of Engineering and Economics;

Baltic Academy of Tourism and Business (non-governmental).

Vocational diploma in hotel service:

Petrovsky College;

St. Petersburg Technical College for Management and Commerce;

Tourist and Hospitality College of St. Petersburg ;

Russian Traditional Culture College of St. Petersburg ;

St. Petersburg Technical College;

Vocational Department, St. Petersburg State University of Service and Economics;

Vocational Department, St. Petersburg State University of Technology and Design;

Nutrition Economics and Technology College, St. Petersburg Institute of Trade and Economics;

Pushkin Leningrad State University College;

St. Petersburg College of Tourism and Business (non-governmental).


Hotel chains operating in St. Petersburg

The following major international operators work in St. Petersburg :

Kempinski

Corinthia

ACCOR Group (Novotel and IBIS brands)

Rezidor Hotel Group (Radisson SAS and Park Inn brands)

Sokos Hotel

Marriott (Courtyard by Marriott and Renaissance brands)

Reval Hotelligrupр

Starwood Hotels & Resorts (W brand)

Orient Express Hotels LLP

Best Western International

Rocco Forte Hotels

InterContinental Hotels Group (IHG)

Top International

Cronwell Hotels & Resorts

Source: CISP

Foreign Hotel Operators in St. Petersburg

7

List of Federal Regulatory Documents Concerning the Hospitality Sector

1. Civil Code of the Russian Federation

2. Law of the Russian Federation of 07 February 1992 No. 2300-1 «On protection of consumer rights»

3. Federal Law of 24 November 1996 No. 132-FZ «On tourist activities in the Russian Federation»

4. Federal Law of 25.07.2002 No. 115 «On the legal status of foreign nationals in the Russian Federation»

5. Rules for Provision of Hotel Accommodation Services in the Russian Federation (approved by Resolution of the Government of the Russian Federation of 25 April 1997 No. 490)

6. GOST R 50645-94. Tourist Services. Hotel Classification

7. GOST R 51185-98. Tourist Services. Accommodation. General Requirements»

List of Municipal Regulations Concerning the Hospitality Sector in St. Petersburg

1. Resolution of the Government of St. Petersburg of 30 December 2010 No. 1813 (as amended on 02 August 2012) «On approval of the regulation on the procedure for cooperation of St. Petersburg bodies of executive power in preparation and taking decisions on allocation of real estate objects for construction, reconstruction and preparation for operation»

2. Resolution of the Government of St. Petersburg of 06 July 2004 No. 1268 (as amended on 16 December 2009) «On the Hotel Infrastructure Development Programme»

Legal Regulation of the Hospitality Sector of St. Petersburg

6.1

6.2

6

Contacts:

+7 (812) 576 6988 +7 (812) 576 6041+7 (812) 576 6081

[email protected]

Phone:

Fax:

E-mail:

http://www.cisp-spb.ru/

Entrance 6, Smolny

191060, St.Petersburg, Russia

© Committee for Investment and strategic projects

www.st-petersburg.ru

St. Petersburg Government