St. Petersburg hoteliers are about to increase their rates by 30% for the high season 2017, a real estate consultancy Knight Frank said in the St. Petersburg Hospitality Real Estate Market 2016 report. Growing tourist numbers and rather high occupancy rates are driving the market’s greed for even more money and the wish to capitalize on record-breaking incoming flows. Experts are not sure that the move will not backfire.
Results of the city hospitality industry look very positive in 2016, if not impressive. Knight Frank reported average occupancy rates as well as revenue per room were rather high during the summer 2016 peak months.
ADR, RevPAR and Occupancy Rates of St. Petersburg hotels in June 2016, roubles
*ADR is average daily rate
**RevPAR is revenue per available room
Source: Umbrella Hospitality CIS
Not surprisingly that keeping in mind cases of overbooking in hot summer months the market players decided to reportedly get their rates increased for the peak period in 2017. The KF’s report gives the same number as we did in our news based on media coverage – 30%. KF doesn’t cite any players so we think that their assumption might be based on the same media reports.
Anyway, it’s worth considering since the move doesn’t seem that logical as it might do. The KF report notes that record breaking figures were achieved mainly due to Asian (first of all, Chinese) and Russian tourists, the both segments are sensitive to price. The wealthy Europeans and American are decreasing, so the increase may cause lack of visitors next summer.
Another important factor here is that the existing 26 762 rooms will be added by 1 876 more from newly built hotels by the end of 2018. Will there be enough guests for all the facilities?
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