Starting in 2025, tourists visiting St. Petersburg will no longer be charged the курортный сбор (resort fee). Instead, hotels will begin paying a tourist tax, which could rise to as much as 5% of revenue by 2029. This shift, initiated by federal authorities and passed into law in July 2023, is set to impact the profitability of hotels and potentially increase accommodation prices in the city.
Key Tax Changes
Under the new law, hotels will be responsible for paying the tourist tax. The tax will begin at 1% in 2025, gradually increasing to 5% by 2029. This progression raises concerns among hoteliers, as the tax is expected to significantly affect their revenue. By 2027, for instance, the tax rate will reach 3%, which hotel owners, such as Yunis Teymurkhanly of Helvetia Hotel, say could be a large burden on their turnover.
A key point is that hotels will not be able to make any deductions from this tax. This means the tourist tax will be calculated as a percentage of the hotel’s total revenue, and there are no provisions for reducing the taxable amount based on expenses or exempt categories of guests. As a result, hotels will have to pay the full tax on their turnover, directly affecting their profit margins.
One major difference between the old resort fee and the new tax is that the resort fee was directly paid by tourists, while the tourist tax will be paid by the hotels themselves. Additionally, while the resort fee was intended to fund the development of tourism infrastructure, the new tax will go into the city’s general budget, without any specific allocation for tourism-related projects.
Impact on Hotel Businesses
The progressive nature of the tourist tax, particularly the eventual 5% rate in 2029, has sparked fears that many hotels may struggle to remain profitable. Some experts worry that this could lead to price increases for guests, as businesses will need to pass these additional costs onto consumers. The Russian Hotel Association’s vice-president, Alexey Musakin, has expressed concerns that this tax will make it difficult for hotels to invest in upgrading their facilities or maintaining service standards.
Additionally, there are questions surrounding how the tax will be administered. Unlike the resort fee, which was overseen by the city’s tourism development committee, the tourist tax will be managed by the Federal Tax Service (FNS). This shift could lead to more stringent consequences for non-compliance, which is a point of concern for hotel managers. They fear potential disputes over tax calculations and how hotel services, including room rates and additional services like meals, will be taxed.
Seasonal and Hotel Category Differentiation
One positive aspect of the new tax system is the introduction of differentiated rates based on seasonality and hotel category. This means higher tax rates during peak seasons and for luxury hotels, while budget accommodations like hostels will face lower rates. However, there remains some dissatisfaction, particularly from smaller hotels, regarding the minimum tax amount of 100 rubles per day, which may disproportionately affect lower-cost accommodations.
Future Outlook for St. Petersburg’s Tourism Sector
The new tourist tax could further strain St. Petersburg’s hotel industry, which is already grappling with rising operational costs and a slow recovery in foreign tourist numbers. Domestic tourism is also showing signs of fatigue, with many Russians opting for alternative travel destinations.
The full impact of the tourist tax will unfold in the coming years, but one thing is certain: both hotels and tourists will need to navigate these new financial realities as they plan their stays in St. Petersburg. The city’s hospitality sector is awaiting further clarification on how the tax will be implemented and hopes for a smooth transition to this new system.
