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Business news, 26.02.2006 15:19

City Accommodates 5-Star Kempinski

hotels_kempinski St. Petersburg welcomed yet another luxury brand Wednesday as international operator Kempinski officially opened its new 5-star hotel. The centrally located hotel, situated on Moika 22, offers 23 suites and 174 rooms.

“The hotel offers a wide range of luxury accommodation designed especially to meet the needs of the modern traveler and businessman,” said Maria Sobolevskaya, executive assistant manager at the hotel.

In fact the hotel has been operating since last spring, though some rooms and parts of the building were still to be completed. The hotel’s owner — Petersburg Real Estate Agency — invested about $20 million into construction and restoration.

“Kempinski is particularly strong at attracting corporate clients but we expect an equal distribution of all types of guest. However, taking into account seasonal shifts in demand for rooms in St. Petersburg, in low season corporate clients will dominate while in high season both business travelers and tourists will be represented,” Sobolevskaya said.

Hotel managers predict an average occupancy rate of 55 percent to 60 percent.

There are now siz 5-star hotels in the city, the others being Grand Hotel Europe, Astoria, Nevskij Palace, Radisson SAS and Emerald.

Intercontinental and Ramada operators plan to open hotels in St. Petersburg and Rezidor SAS will expand its presence.

A number of other projects are due for completion. Raffles International will open a 5-star Swissotel business-class hotel by 2007. Renaissance construction firm will build a 5-star hotel by the end of 2006, and French operator Accor announced construction of a 5-star Sofitel.

“First of all the city needs 3-star and 4-star hotels. In the elite class hotel segment competition depends mainly on the policies of City Hall, on its programs to attract tourists,” said Victoria Kulibanova, development manager at Astera, a consultancy firm for commercial real estate.

“Nevertheless, large investment projects are being realized, large companies’ headquarters are moving into St. Petersburg. So the opening of Kempinski hotel is unlikely to seriously affect competition in the 5-star hotel segment,” Kulibanova said.

According to Astera estimations, the pay-back period for such a hotel will be over eight years.

“Most probably, as with other hotels, in high season the hotel will mainly make its earnings from tourist groups, in low season — from businessmen. The average annual occupancy in such hotels is 60 percent to 65 percent,” Kulibanova said.

According to research done by BCG experts last year on the order of City Hall, in order to become a center for international tourism the city needs 12,000 new hotel rooms by 2012.

According to a statement made last year by City Governor Valentina Matviyenko, by 2008 “the number of hotel rooms will double, and hotels will serve up to six million tourists.”

By Yekaterina Dranitsyna

Staff Writer

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