The article provides an analysis of the 3 stars hotel sector in Moscow and St. Petersburg in order to determine this sector potential. The author provides the comparative analysis of the condition of the main indicators characterizing the hotel business in this category in St. Petersburg and Moscow taking into account their dynamics. The author uses the mathematical model, developed to assess innovation potential of the hotel industry component of St. Petersburg, as a region and calculated the potential part of the 3 stars hotel sector. The paper points out that the results of calculations enable to opt for the best strategy for development of this sector of the hospitability business.
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