DESTINATION RUSSIA – SHIFTING TRENDS TOWARDS DOMESTIC AND INCOMING TOURISM

DESTINATION RUSSIA – SHIFTING TRENDS TOWARDS DOMESTIC AND INCOMING TOURISM

The session started with presentations by heads of Russian regions. Governor of St. Petersburg Georgy Poltavchenko stated that tourism was one of the most important drivers of the city’s economy. He stressed the importance of developing the infrastructure, in particular, hotels, and introduced a separate programme aimed at building three- and four-star hotels and providing preferences to investors. The Governor took note of the success of new products and mentioned tourist routes as an example. According to Mr. Poltavchenko, tourists are interested in tours dedicated to renowned Petersburgers. The so-called ‘red’ tours that familiarize travelers with the history of the USSR are especially popular among Chinese tourists. “The overall effect from tourism amounts to circa RUB 250 billion. We believe this is not the limit and expect to build it up further”, Mr. Poltavchenko added.

Governor of the Vladimir Region Svetlana Orlova and Acting Governor of the Yaroslavl Region Dmitry Mironov also highlighted the growth of tourism in their regions, while stressing the need to attract private investors in order to set up new tourist sights.

Head of the Russian Federal Agency for Tourism Oleg Safonov caught up on the topic. According to Mr. Safonov, Russia’s appeal in the eyes of tourists has grown in recent years. “Today, domestic and incoming tourism accounts for 3.4% of GDP. President Vladimir Putin has set the goal of bringing it up to 10%”, he noted. Mr. Safonov stressed that Russia needs a strong tourist brand and gave an account of its development. The speaker mentioned such priority areas as building up the infrastructure, raising the quality of tourist services and effectively promoting tourism on the domestic and foreign markets. He took special note of the Federal Target Programme for Domestic and Incoming Tourism Development based on a public private partnership. “There should be at least RUB 3 coming from extra-budgetary sources for every Rub 1 of budgetary provisions”, Mr. Safonov explained. According to the Agency Head, over RUB 70 bn had been raised in this way. Mr. Safonov also outlined the impact of the economic situation on the industry. “The weak rouble and low inflation rate are good for the industry, as they stimulate incoming and domestic tourism and restrict outgoing tourism”, - he said.

Chief Executive Officer of the Agranta Group and General Director of Roza Khutor Sergey Bachin emphasized the effectiveness of the Federal Target Programme and suggested that it should be prolonged “for another ten, twenty or thirty years”. According to Mr. Bachin, investors had become accustomed to the programme and were now able to use its tools. He urged setting up and fostering small projects and supporting enthusiasts ready to build small businesses in the area of tourism. Mr. Safonov welcomed the proposal and promised to consider it.

Managing Director for Europe, the Middle East and Africa, Airbnb Inc., Olivier Gremillon reminded the participants that tourism should benefit the local people. He said that residents of the Russian cities hosting football tournaments in 2017 and 2018 would be able to lease out their flats to tourists. “The number of people willing not just to go sightseeing but to acquire a unique experience and discover a city from the inside is growing”, Mr. Gremillon explained.

The Chief Executive Officer of Hyperloop Transportation Technologies Dirk Ahlborn took note of the progress observed in the Russian tourist industry. “There were times I found it difficult to use the Moscow Metro because I couldn’t read the signs, but now tourists visiting Russia don’t need to be able to read Russian, and this is a result of innovations”, Mr. Ahlborn reckoned. He called for investing in innovations that would make it easier for tourists to travel around the country and communicate. Mr. Ahlborn gave the example of the Hyperloop high-speed train, which – according to him – should allow tourists and Russian citizens to get from St Petersburg to Vladimir in just an hour.

Vice President of PJSFC Sistema and Chairman of the Board of Directors of Cosmos Group Dmitry Pavlov appealed for more responsible treatment of statistics and providing investors with reliable data. He mentioned, as an example, the Ukrainian citizens, who appear in the official statistics but are often migrant workers, not tourists. Mr. Pavlov also gave an account of the barriers that hinder investment activity: low international coverage and the complex procedure of visa issue to foreigners, the lack of attention from the state and underdeveloped infrastructure.

Secretary General of the International Civil Aviation Organization (ICAO) Fang Liu, Chairman of Supervisory Board of TUI Company Klaus Mangold and General Director of the Federal Passenger Company Petr Ivanov also took part in the session.