St Petersburg Prepares For Average Tourists

<BR>The St Petersburg and North-West Russia Development Fund is to open five small, mid-range hotels in time for the city's 300th anniversary. <BR>The fund has been entrusted with the management of five buildings in the city centre, for a period of three years. <BR>According to initial estimates, the required investment will amount to about $50m, producing a total of 400-450 new rooms. The cost of each hotel room works out at $110-125,000, while the world average cost for rooms of the same quality is $80,000.<BR>Sergei Kovalov of Joint Capital considers that taxes are too high to attract investment to the hotel network. "In today's conditions there is no point in hoping for private investment if you don't offer any tax concessions. This is why all the so-called investors are struggling to gain control of properties just in order to freeze them until better times."<BR>The development fund plans for a Russian company to manage the new hotels, but there are not yet any management companies in Russia which are respected by foreign tourists. For this reason the newly-created company will be working under the name of a well-known hotel chain. Negotiations are already underway with international hotel networks about creating a joint enterprise.<BR>The new hotels will be oriented toward average-income (by Western standards) tourists, a group poorly catered for in the city.