City’s Hotels Seek to Boost Winter Revenues

By Olga Kalashnikova

The St. Petersburg Times

Published: October 31, 2012 (Issue # 1733)

FOR SPT Hotels such as the Courtyard Marriott offer venues for business events.

St. Petersburg hotels traditionally rely on conferences and other services to see them through the winter period, when fewer tourists visit the city than in the summer months. This year, however, local hotels are expecting more tourists in the coming winter season than during the same period a year ago.

According to data from Maris, part of the CBRE affiliate network, this year three-star hotels will see 42-52-percent occupation (compared to 35-42 percent in 2011), four-star hotels will be 40-47 percent occupied (compared to 39-45 percent in 2011) and 35-45 percent of rooms will be occupied in five-star hotels (compared to 35-42 percent in 2011).

“This year, the average occupancy rate at hotels is higher in general than in 2011, which is partly explained by the hotels’ flexible pricing policy,” said Natalya Kireyeva, senior analyst at the consulting and valuation department at Maris.

The winter is traditionally the low season for hotels in St. Petersburg, with the weather being a major factor in tourists postponing their trip until a warmer time of year, said Marco Fien, general manager of the Courtyard by Marriott St. Petersburg Pushkin hotel.

“Moreover, the popular White Nights period that creates the special St. Petersburg charm and attracts most guests to the city falls in June and not in the winter,” said Fien.

“However, there are guests who would particularly like to visit Russia in winter, partly to change their mind about widespread stereotypes. During the winter season we have tourists from the U.S., China, Japan, Italy, Germany and France. But most of our guests in winter are Russian tourists,” he said.

WINTER SAVINGS

The average rate for a hotel room in St. Petersburg reserved at the hotel reception desk in low season is 2,550 rubles ($80) per night at a three-star hotel, 4,500 rubles ($140) at a four-star hotel and 11,000 rubles ($350) for a night in a five-star hotel. In high season guests pay on average 4,500 rubles ($140) per night for a three-star hotel and 19,500 rubles ($620) for five-star accommodation, according to the Maris data.

“In low season, our guests are mainly cost-oriented people or people who have time and aren’t bothered by the weather conditions, but are guided by what to see or what to do in St. Petersburg,” said Edgard Pauly, general manager at the Novotel St. Petersburg Centre.

“And in winter we have a lot to discover, no rush, no queues. Tourists who are interested in art and culture enjoy wintertime,” he added.

In addition to the city’s cultural life, business activity in St. Petersburg continues throughout the winter season, and there are plenty of business travelers among visitors to the city.

“In the low season, hotels mainly depend on business tourism, the corporate market and online booking systems,” said Natalya Minina, general manager at the Helvetia hotel.

“The Internet, including social networks, blogs and forums, has become a new venue for the promotion of hotel services,” said Kireyeva. “The hotels are beginning to take advantage of new ways of promotion on the market.”

PROVIDING INCENTIVES

The low and shoulder seasons are periods when hotels provide tourists with special rates and offers.

“Most hotels are of the same mind in choosing ways to attract tourists in low season,” said Fien. “These are special offers for individual guests, special rates and conditions for corporate clients and bonus programs for loyalty program participants.”

“Every Friday we have hot sales when we sell certain periods for special rates; you have a 24-hour window in which to book a room using this offer,” said Helvetia’s Minina.

“We have also special rates for early bookings — if a guest books a room 30 days before the trip and chooses a rate without the option of a booking cancelation, they get a significant discount. For those who make a last-minute booking there is also a small bonus. Moreover, we offer special rates for weekends as the occupancy is a little lower then than on working days,” she added.

Traditionally, December is a busy time for New Year corporate events that help the hotels to survive the low season. Applications for corporate parties start coming in at the beginning of December, industry professionals say. The hotels provide companies with their banquet halls and restaurants.

“If the client wishes, we not only provide them with gastronomic services, but help to find professional organizers of festive programs,” said Natalya Belik, PR director for Corinthia Hotel St. Petersburg.

“Some hotels provide catering for other city venues. At our hotel, this tradition has its roots in a time when the choice of hotel banquet halls was limited,” she said.

FOR SPT The city’s Helvetia hotel offers discounts on bookings every Friday in low season.

FESTIVE ADD-ONS

During the winter festive period, hotels often increase their production of cakes, partly due to the growth of special orders for corporate events or for the New Year and Christmas.

Although the New Year holidays are on the threshold of the low season, hotels can increase sales as a result of the expansion of festive offers and additional services for both tourists and city residents, said Belik.

“Additional services can include transfer from and to the airport and help with organizing excursions and cultural activities,” said Kireyeva.

Hotels organize events that can be of interest to local residents, for example, exhibitions or festivals in the hotel.

“We let space for an international porcelain conference, which can also be of interest to collectors,” said Minina.

Hotels that have conference facilities have the most to gain from providing a venue for corporate events. The autumn, winter and spring are the busiest times for holding conferences, seminars and training events, according to hotel representatives.

“The city’s business life is at its peak,” said Minina. “Moreover, room rates are lower in the low season, which is one more reason to hold a corporate event. With the emergence of our conference facilities, we have observed an increase in interest from corporate companies and agencies specializing in business travel,” she said.

ROOM FOR GROWTH

For hotel industry representatives and event organizers, however, the number of conferences held in the low season is not enough.

“New initiatives in promoting St. Petersburg as a destination for individual and business tourism on the international market could help to attract new business events to the city,” said Fien. “It is nice to hear that such initiatives are being actively promoted by the city government.”

For incentive tourism, however, St. Petersburg is too rainy and cold a destination, believes Pauly.

“For MICE [Meetings, Incentives, Conferences, Events], it is more interesting to choose warmer destinations with cheaper prices, such as Thailand, the Middle East, Egypt or Turkey,” he said.

For other corporate events, the opportunity to hold a conference on the same site where guests are staying is a convenient option. The technical equipment of many hotel conference facilities equals those at separate specialized conference venues, so many companies orient their choice toward hotel offers.

“If the participants of the conference are not St. Petersburg residents, the choice of a hotel as a provider of both accommodation and conference facilities is a logical decision that makes logistics easier and reduces expenses,” said Fien.

“Moreover, it is a guaranteed level of service, especially when it comes to hotel chains, and it is also a question of company prestige,” he said.

“For many organizers, the determining factor in making the decision is the complex infrastructure that is offered by hotels. These are conference rooms, restaurants, the kitchen, qualified staff, audio-video conference equipment and 24-hour service,” said Fien.

“We try to organize events at hotel conference facilities, because both we and the client get all the services in one place — the event rooms, accommodation, meals and other requirements,” said Dmitry Alexeyev, head of the St. Petersburg branch of Reiseburo Welt, a company that arranges events and provides travel services.

“For the event’s organizer it is far more convenient to choose a large hotel with enough conference halls and guest rooms; the organizer can be sure that all the participants will come to the conference room and will not lose their way arriving from another hotel, and will not decide to skip a boring event for an interesting excursion. It also reduces logistics expenses,” he added.

Yet the occupancy of St. Petersburg conference rooms leaves a lot to be desired. According to Reiseburo Welt data, there are only a few hotels that can host a conference with more than 1,000 participants (taking into account the number of guest rooms and conference halls).

“The new ExpoForum convention and exhibition center is going to open in the city in 2014, but to develop MICE in the city it is necessary to launch at least two or three hotels like Holiday Inn Moskovskiye Vorota or Park Inn by Radisson Pribaltiiskaya,” said Alexeyev.