In levels of seasonality, visitor breakdown and length of stay, the hotel industries in Russia’s two largest cities continue to differ. While a lack of midrange, quality hotels unites the two markets, some experts maintain that the greater differences have led to different ways of dealing with the current economic situation.

“There have been two different strategies for the two different markets,” said David Jenkins, head of hospitality at DTZ Russia and the CIS. This difference has been most apparent in the reaction of upscale and luxury hotels in the two cities. “St. Petersburg has been maintaining rates and allowing occupancy to slip slightly,” Jenkins said. In Moscow, hotels have been reducing rates, in some cases up to 30 percent or 40 percent to maintain occupancy, he said.

Moscow’s hotel market is fundamentally based on business travelers, while tourists play a far greater role in St. Petersburg’s hospitality industry. This, coupled with the city’s climactic conditions, means that seasonality has a much greater effect on the market in St. Petersburg.

The capital regularly plays host to numerous corporate events, and with the headquarters of a great many Russia and CIS-wide operations of international companies in the city, Moscow has a constant flow of business visitors. “Business travelers saved Moscow, as they are less price sensitive than tourists,” said Marina Usenko, head of Jones Lang LaSalle’s hotel department.

That is not to say the northern capital is solely a tourist destination. “Political and economic forums [in St. Petersburg], which have begun to be held more frequently, are often planned for the high season, sometimes leading to a spike in demand for hotels for a limited period,” said Yekaterina Kirillova, revenue manager at the Corinthia Nevskij Palace hotel in St. Petersburg.

All this logically points to two separate approaches: In one market, hotels compete for the business travelers’ custom. “Last year saw serious price wars focused on occupancy,” Usenko said, referring to Moscow. Meanwhile in the other market — St. Petersburg — ensuring loyalty and earning as much as possible per visitor, by trying to maintain rates and creating package deals, is more productive.

The reality is, of course, much more nuanced, as commentators readily point out. “At the beginning of the recession, hotels in Moscow did indeed lower prices more in comparison with St. Petersburg, but not for long,” Kirillova said, adding that prices on average in St. Petersburg are still much lower than in the capital.

However, a second factor has also played a role. Moscow has a wealth of old Soviet hotels compared with St. Petersburg, about 40,000 to 50,000 rooms in total, Jenkins said. In a recent report on the capital’s hospitality market, Jenkins terms these the “silent majority,” referring to hotels such as the Cosmos, with 1,767 rooms, the Salyut in Moscow’s southwest, with 1,091 rooms, and the colossal 4,929-room Izmailovo Hotel complex.

“They have provided rich feeding grounds for the larger international hotels to poach from, as the transient corporate market contracted in 2009,” Jenkins wrote in the report.

“Many upscale managers looked everywhere, wooing clients from a range of locations including the unbranded midmarket hotels,” Usenko said. Many of these hotels were built in preparation for Moscow’s 1980 Olympic Games. But in St. Petersburg, there is not a large stock of older midrange hotels. The city’s main Soviet-era constructions include the Pulkovskaya and Pribaltiiskaya hotels that are both now internationally managed, having come under the Park Inn brand.