St Petersburg – Russia’s new luxury destination?

Known as Russia’s cultural capital, St Petersburg is also Russia’s prime tourism destination, in sharp contrast with its capital city, Moscow, which keeps away tourists due to its poor infrastructure. In the past years, St Petersburg has been claiming its spot as Russia’s leading congress and conventions destination, such as the International Energy Forum, which held its 12th edition in the city in May this year.

Unlike Moscow, St Petersburg has a well balanced hospitality offering, both from the point of view of positioning (14 five star, 34 four star and 69 three star hotels) and average rates. Several major international hotel chains have been present in the city - Rocco Forte, Starwood (W Hotel), Kempinski, IHG (Crowne Plaza), Radisson and Corinthia. In comparison with Moscow which generates mostly corporate travel, St Petersburg maintains a 40/60 percentage ratio, between leisure and corporate travel. The much anticipated opening of the Four Seasons Hotel in St Petersburg, Spring 2013, will be welcoming addition to boost the attractiveness of the destination and raise the bar both in terms of facilities and service.

September this year, saw the opening of TSUM’s sister department store in St Petersburg, the DLT – short for Dom Leningradskaya Torgovli or House of Leningrad Trade – was initially founded in 1909, and back then it was one of the first of such establishments in all of Russia. It’s housed in a beautiful art déco-style building with a voluminous atrium and expansive curved glass roof, designed by russian architect Ernest Frantsevich Virrikh.

It has taken six years to renovate the DLT building and to fully revive its former splendour. The renewed department store now boasts no less than 32,000 sqm, spread over 6 floors. The ground floor features the extensive collections of accessories, jewellery, cosmetics and perfumes, and the first and second floors are home to the men’s and women’s apparel collections. VIP services with private stylists are available, most brands being represented with shop in shops and corners. Given the fact that some major luxury brands are still operated in franchising and not through direct operations, in many cases competitors of the group which owns and operates TSUM and DLT, there is a smaller number of major luxury brands with mono-brand spaces. For instance, Louis Vuitton, Prada and Chanel are not present at DLT.

Luxury brands have take a sensible cautious approach to St Petersburg, which, despite its splendour, it does not boost a comparable wealthy population such as Moscow’s. It will probably take several more years for St Petersburg to attract more wealthy foreign travellers, much needed measures being a more lax visa system (ideally on arrival), a better direct flights connectivity with major foreign capital cities and a more intense promotion to focus on the luxury lifestyle St Petersburg can provide. Rich travellers from CIS countries and other Russian cities to St Petersburg are also of utmost importance for the city’s luxury market, provided retailers are able to compete with major European and Middle Eastern luxury shopping hubs.

Oliver Petcu

DLT Luxury Mall, St Petersburg, Russia