Surprisingly enough, this policy is pursued not only by the 4 and 5-star hotels where the delegations of the countries to take part in the event will be staying, but also by some mid-range hotels. For example, a 3-star hotel in the middle of the city is charging 2000 roubles ($600) for a night.

Desperate, the head of anti-monopoly watchdog Oleg Kolomychenko threatened the hotel owners that they would appeal to the president in case the situation does not change.

Kolomychenko said that such price hikes are traditional in Davos, Switzerland, which hosts the world’s largest annual economic forum. However, if Davos is a privately-run commercial venture, the St. Petersburg economic forum is a non-profit event designed to bring prestige to the country. This means that the price hike may reflect very negatively on the forum and hamper foreign investments in the country. Further, the rise can have a negative effect on Russia’s bid for the 2018 and 2022 Football World Cup, which could bring significant numbers of tourists to Russia.

Article 11 of the Russian Federal law on competition protection says that a one-time increase in tariffs by prior agreement is illegal, so the watchdog could fine the hotels in order to make them lower their prices. The hotels, however, can dispute the case in the court of arbitration, which was done very successfully by a number of Moscow hotels last year during the Eurovision song contest – when the court said there was not enough evidence to charge it with price manipulation. The hotels might also choose to swallow the fine – and still make a profit since the price rise is almost 800%.