Hotels will set a limit on the cost of rooms during the forums

Two years later, the Federal Antimonopoly Service (FAS) managed to agree on a bill to set maximum prices for hotel accommodation during particularly significant international events. Now the cost of rooms, for example, during the forums in St. Petersburg and Vladivostok can be 13-16 times higher than during normal times, which causes dissatisfaction among event participants. Market players expectedly criticized the new regulation, warning that it could alienate hotel business investors.

The Federal Antimonopoly Service, without comment, agreed with the relevant ministries and departments on amendments to the law on tourism activities, which prohibit setting prices for hotel accommodation above the maximum during the period of significant international events. This follows from the text of the letter sent by the regulator to the Ministry of Economy at the end of August (Kommersant has a copy of it). The FAS and the ministry confirmed this information.

FAS developed such amendments on behalf of Mikhail Mishustin in the fall of 2021 (see “Kommersant” dated September 2, 2021). According to the document, the holding of particularly significant international events is provided for by federal law or an act of the president. These are, for example, the St. Petersburg International Economic Forum (SPIEF), the Eastern Economic Forum (EEF), the Russian Investment Forum in Sochi. The maximum prices for hotels, as conceived by the regulator, are calculated according to the methodology of the government, which should be described in a separate act after the approval of the amendments.

Hotels are obliged to inform consumers about the maximum prices for accommodation during significant forums. For violation, a fine of 20 thousand to 500 thousand rubles is expected.

Aleksey Kozhevnikov, a member of the public expert council of the tourism national project, believes that after the establishment of marginal prices for hoteliers, homeowners who rent out their property for short-term rent will become more active. “This is often a ‘grey’ market that operators of quality properties will have to compete with,” he says. The expert doubts that the adoption of the bill will lead to significant losses for hoteliers, but fears that it will create a negative precedent. “First, prices are regulated for a specific event, then they will start doing it permanently,” he notes.

The FAS initiative initially provoked sharp criticism from the business community, Roman Yeremyan, deputy chairman of the Union of Tourism and Hospitality, recalls. According to him, this runs counter to the desire of the authorities to attract investors to the hotel business, where profitability has been low in recent years. Most major forums are held during the high season, for example, SPIEF during the white nights, Mr. Yeremyan notes.

Azimut Hotels explained that accommodation prices during the EEF, SPIEF and other forums are growing due to the rush demand. Trivio representative Andrei Baturin recalls that hotels work on the principle of dynamic pricing: the cost is influenced, in particular, by the level of occupancy and seasonality.

According to him, with early booking of hotels with accommodation during major forums, prices are 20-30% more expensive than usual, before the event itself, the increase can be significant.

Aeroclub Managing Director Yulia Lipatova says that during the SPIEF, average accommodation prices in St. Petersburg triple, and in five-star hotels – up to 13 times. “This year in Vladivostok, during the EEF period, the cost of a night has increased 16 times by the beginning of September,” the expert says. Tatyana Bolotina, Continent Express Supplier Relations Director, notes that some SPIEF hotels can be booked for at least four nights, which is an additional financial burden.

Yulia Lipatova notes that the placement price is becoming unpredictable and it is difficult for companies sending delegations to forums to budget for it. “There are many complaints about artificially inflating prices: at the last forum in St. Petersburg, even representatives of the delegation of African countries pointed to this,” says a Kommersant interlocutor from among federal officials.

Roman Yeremyan is sure that there are no examples of such regulation abroad. He considers an alternative to limiting budgets for accommodation for state-owned companies and officials, postponing events in the off-season. Otherwise, he believes, we can talk about price regulation during major forums and in other industries, including transportation and catering.

Alexandra Mertsalova