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The past, present and the future of the Russian tourism industry

Author: Alex Freedmann Section: Business & Finance

Issue: July 2010, Vol. 5, No. 6

Tags: Tourism industry

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The Russian Sports, Tourism and Youth Affairs Policies Ministry (Sports&Tourism Ministry) in May held its annual policies review meeting that was devoted to the searches and definition of the priority directions and mechanisms for the realization of the state policies on the development of internal and external tourism in the country.

The meeting was attended by Minister Vitaly Mutko, other high-ranking ministry officials; heads of other related government agencies and institutions, such as the Federal Tourism Agency, heads of regional sports & tourism ministries as well as the representatives of the nation’s leading tourism-related educational institutions and leading players on the Russian tourist services market.

Speaking at the opening of the meeting, the minister noted that tourism has been declared a priority sector of the Russian economy, and consequently, its condition and development have become subjects of keen attention from the state. “This is why we need to discuss the issues of efficiency of state regulation of the development of the tourism industry, review and exchange opinions over last year’s results in the industry, and finally define the priority directions of our work in the near future.”

The ministry’s performance results in 2009 in general, and the tourism industry in particular, were presented by Nadezhda Nazina, the director of the Tourist Activity and International Cooperation Department in the ministry. She also informed the meeting participants about the situations in the tourism industry and the course of preparation and realization of the government special program “The Development of Internal and Outward Tourism in Russia in 2011-16.”

Tourism industry’s contribution to GDP

According to the Sports & Tourism Ministry’s data, tourism contributed 2.5% to the national GDP in 2009, and when the so-called ‘multiplication effect’ is taken into consideration, then the industry’s overall contribution rose to 6.3%. Broken down into its components, this included the volume of tourist services that totaled 70.9bln rubles, or a 7.5% decrease from 73bln rubles generated in 2008, and the amount from hotel services and other accommodation facilities that stood at 101bln rubles, which in comparison with the 107.5bln generated in 2008, meant a 14% reduction year-on-year. Also, according to the ministry’s report, the rooms stock was increased by 117 new hotels and accommodation facilities in 2009, thus bringing the overall number of hotel rooms in Russia to about one million.

“Tourism has been declared a priority sector of the Russian economy, and consequently, its condition and development have become subjects of keen attention from the state.”

According to the Rosstat and Sports & Tourism Ministry’s latest data, the Unified Federal Tour Operators Registry currently contains 566 companies specializing in Russia-bound tourism and 2169 and 1858 companies that operate in the spheres of outward-bound and intra-Russia tourism services, respectively. In total, the Russian tourism industry employs about one million people or about 2.3% of the nation’s employable workforce.

The most popular types of rest and tourism services on the domestic market are as follows: beach (38%), cultural and sightseeing (20%) business tourism (18%), health-improving, sports, including the so-called ‘extreme’ types (15%), event-driven tourism (pilgrimages, ecological, cruises, etc. (about 9%). The ministry’s are plans for the future are grandiose, including more active promotion of Russia’s tourist opportunities abroad over the next five years as stipulated in the government programs for the development of internal and outward tourism services in Russia in 2011-16. For example, almost 3bln rubles have been allocated to the promotion programs alone. The ministry predicts a 4-4.5% growth in tours volume in 2010.

In conclusion, the sports & tourism minister called on his colleagues and subordinates to be more active in their works and try to make maximum use of all the opportunities available in both the industry and ministry for promoting Russia as an attractive tourist destination for all categories of domestic and international travelers. “This is why we should always remember that all of us are working in one of the key industries in the global economy that significantly influences the dynamics of changes on the basic development parameters of the leading countries of the world, solves important social problems and promotes rapprochement among peoples and growth of mutual understanding among them.”