St. Pete Hotels 8th-Priciest in World

St. Petersburg has entered the top 10 in a survey of international cities with the most expensive hotels while Moscow has dropped from fourth to 17th place in the last year.

According to a survey conducted by British agency Business Travel International, for the business travelers, St. Petersburg hotels moved up from 15th to eighth place.

Fierce competition by Moscow hotels can explain the rapid reduction in prices of business-class rooms in the capital.

In St. Petersburg, however, where no such competition exists, hotels can allow themselves the luxury of charging astronomical prices.

The price for business-class rooms in Moscow hotels is $200 to $250 per night. But these prices are paid only by those who travel independent of groups and check in without prior reservations.

Discounts are allocated to travel agencies and for advance bookings. Corporate clients, who account for about 60 percent of the hotel trade in the capital, can get reductions of up to 50 percent.

"The market indicator of a hotelТs activity is the average price of a room," said Marina Smirnova, head of the information department of the University for the Hotel, Tourism and Restaurant Business Association. "In Moscow over the first six months this year this figure was $167 while last year it was $202. The tendency to reduce prices remains, though in recent years the demand has leveled out."

In New York, the most expensive city in the world according to BTI, a night in a business-class room costs an average of $245.

According to the Russian Association of Tourist Agencies, 14 to 15 hotels are operating in Moscow qualify as business class.

"We are constantly fighting for clients," said Andrei Abadzhidi, public relations manager with MoscowТs Baltschug Kempinski Hotel.

In St. Petersburg there are three times less business-class hotels than in the capital.

"It is specifically because of this lack of competition that the St. Petersburg hotels are able to keep prices at their current levels," Smirnova said.

Another reason for high prices is the greater tourist potential of the northern capital.

"Recently tourists have been more and more actively interested in St. Petersburg as a tourist destination," Abadzhidi said.

The prices for St. Petersburg five-star hotels over the past 12 to 18 months have not changed.

In 1999 the average price over the year was $184, this year it was $180. In the Grand Hotel Europe the average price for this year is $218. The average demand for high-class hotels has increased from 46 percent in 1998 to 56 percent in 2000.

In the near future, competition may be on the up in St. Petersburg.

A Radisson-SAS four-star is to open in mid-2001. In addition, the 200-room Severnaya Korona hotel is nearing completion. The hotel has been under construction for the past 10 years.

Natalya Belik, public relations director with Sheraton-Nevskij Palace, said that the emergence of new four- and five-star hotels in St. Petersburg could well bring about a fall in prices.