As at the end of June 2007, the hotel sector of St. Petersburg numbered 104 hotels having 14 900 rooms (excluding mini-hotels^* and hostels).

Table1. Summary of St. Petersburg Accommodation Facilities

Source: Colliers International

The breakdown of St. Peterburg hotel rooms is shown below. Three-star hotels hold the top position, followed by four-star and economy class hotels, and the remaining share is taken by five-star hotels (11%).

Figure 1. Distribution of St. Petersburg Hotel Rooms by Category

Source: Colliers International

60% of all hotel rooms are concentrated in the four downtown districts. A traditional leader is the Central District, providing for 28% of the aggregate supply (see Figure 2).

Figure 2. Distribution of St. Petersburg Hotel Rooms by District

Source: Colliers International

Hotels under Construction and in Design Phase

During the first six months of 2007, 10 mini-hotels with a total number of rooms not exceeding 150 were opened in St. Petersburg. It should be noted that major hotels scheduled to have been completed by the end of April 2007 were not opened.

Figure 3. Actual Number of Hotel Rooms as at End of June 2007 and Estimated Increase in Hotel Rooms in Second Half of 2007

Source: Colliers International

Projects scheduled to be completed in the second half of 2007 are listed in Table 2.

Table2 . Hotels under Construction Scheduled to be Opened in Second Half of 2007

Source: Colliers International

All in all, as at the end of June 2007, there are 41 investment projects providing for construction or reconstruction of hotels with 6 042 rooms, as well as over 90 hotel development applications (excluding mini-hotels).

Figure 4. Distribution of Hotels under Construction by District as at Beginning of July 2007

Source: Colliers International

In line with the existing hotels, most hotels under construction (88%) are located in the four downtown districts. The rapid development of Vasilievsky Island (34%), occupying the fourth place in terms of the number of rooms in the already operating hotels, is also worth mentioning in this respect (see Figure 2).

Accommodation rates

On the average, accommodation rates in the top segment hotels are approximately 4 times higher than those in the middle segment (see Figure 5). As regards hotels pertaining to the same category, prices during a particular season may differ by 140% on the average. The segment of four-star hotels demonstrated the highest price spread (260%).

Figure 5. Accommodation Rates by Hotel Class, Roubles per 24 hours

Source: Colliers International

Table 3. The amount to pay depends on the class of apartment (03.01.07-31.03.07)

Source: Colliers International

Table 4. The amount to pay depends on the class of apartment (01.04.07-14.05.07)

Source: Colliers International

Source: Colliers International

SIGNIFICANT EVENTS

• Among the most significant events that took place in the hotel segment of St. Petersburg real estate market in the first six months of 2007 was the emergence of InterContinental Hotels Group (UK), which plans, within 3-5 years, to introduce InterContinental, Crowne Plaza and Holiday Inn branded hotels and become the most well-known name in the Russian market by 2010. They have announced a four-star 339-room Crowne Plaza hotel project in the building of the former Nikolsky Marketplace.
• The hotel chain Starwood Hotels plans to open its first W Hotel in Eastern Europe in mid-2008.
• By 2009, the company Tristar Investment Holdings intends to build in St. Petersburg a five-star hotel complex for 186 rooms at 1/12 Voznesensky Prospekt. Its cost is estimated at $100 million. The hotel will be operated by Four Seasons Hotels & Resorts.
• RSU together with Desna Development LLC, a subsidiary of Renaissance Construction (Turkey), has started the reconstruction of an eight-storey building at 61-61 Ligovsky Prospekt to accommodate the hotel and business center Renaissance Housе (4*, 120 rooms).
• Orco Property Group has established a EUR 250 million investment fund for acquiring hotels in Russia. It is planned to open a MaMaison Hotels & Apartments branded hotel in St. Petersburg.
• The Norwegian investment fund Linstow intends to build three hotels, 150 rooms each, in St. Petersburg by 2010. It is currently in search for sites and buildings suitable for the hotels. The St. Petersburg-based management company Rinaldi Hotels Group acts as adviser to the Norwegian fund.
• The North-Western Financial Group has announced their plans to start, in the first quarter of 2008, the reconstruction of Grand Duke Michael's palace at 8 Admiralteiskaya Embankment. Within two years, a 5+-star hotel with 104 rooms will be opened here.
• The UK fund Northern European Properties Limited (NEPR) has acquired a 302-room hotel with a total area of 29 000 sq. m. for EUR 82 million from another foreign investment fund, London & Regional Properties, which purchased the hotel in 2006 for approximately EUR 50 million from the holding company LenSpetsSMU (the developer of the Rostral Columns complex housing the hotel). When opened, the hotel will be operated by the Finish SOK Holding. The relevant agreement should be concluded by August 2007.
• The Dutch investment company SELINOS HOLDING B. V. has acquired a 10% stake in the joint-stock company Talion (owning a casino and two five-star hotels in St. Petersburg) for EUR 40 million. The receipts (1.4 billion Roubles) will be used to complete the investment project providing for reconstruction of the Eliseevs Mansion at the intersection of Nevsky Prospekt and 59 Moika Embankment.