Tourism: A New Era of Hospitality

2 September 2021

Tourism: A New Era of Hospitality

CONCLUSIONS

Tourist flow has dropped after the pandemic, but the industry has tools that can help it get back into shape and grow

“The pandemic has driven us back quite a lot. We have lost over 80% of the flow and right now, of course, our key goal is to bring the industry back to its previous level and to help it grow even more. First of all, we need to support development of the tourist infrastructure, invite investment, and provide a favourable environment for growth of small and medium-sized businesses,” Vladimir Shchur, Head of the Primorye Territory Tourism Agency.

“We really do have such a tool as the ‘Master Plan for the Most Promising and Popular Territories’ incorporated into the National Tourism Project. <...> What is a territorial tourism project? It’s not just a strategic document; it is a document that will let us analyse and assess tourism potential in each territory in depth and use all regions as efficiently as possible, <...>, build new investment lots, and plan tourism growth in these territories as well and as wisely as possible,” Zarina Doguzova Head, Russian Federal Agency for Tourism.

Investment attractiveness of the tourism industry needs to be improved

“We <...> had an anchor goal: to create such an environment that businesses (large, small and medium-sized) would find tourism investment profitable. Because, if businesses do not invest in tourism, if it does not become profitable, we would not, of course, be able to build a hospitality industry in the country since, as everyone knows, tourism is a private enterprise everywhere in the world,” Zarina Doguzova Head, Russian Federal Agency for Tourism.

A city may well be a tourist destination, but to increase tourist flow, infrastructure needs to be developed

“Cities become tourist products in their own right. In other words, we come to a city to stroll around and enjoy it, to go to a restaurant and try the local cuisine, to visit museums that tell the story of this particular area. It is by building such tourist city centres that the framework for growth of small and medium-sized businesses is created.” Zarina Doguzova Head, Russian Federal Agency for Tourism.

“When tourists come here, they want to visit attractions all over the republic. As of now, we have made provisions in the master plan for investment and creation of tourist centres all through the republic, in the most interesting spots,” Oleg Khorokhordin, Head of the Altai Republic.

“The description of this conference said that by growing tourism we are improving ease of travel among and within the regions. But I beg to differ; I think it is somewhat the other way around. If there is no infrastructure, there is no tourism and that is why it is so important to focus on <...> the infrastructure master plan <...> If there is no infrastructure, as we see in Kamchatka where there is practically no airport, it is nearly impossible to develop the tourist industry on the scale that the region requires,” Alexis Delaroff is the Chief Operating Officer of Accor Russia, Georgia & the CIS.

PROBLEMS

Shortage of infrastructure brings down city and cruise travel attractiveness

“Right now the Far East regions do not have enough high-quality tourist infrastructure, ease of travel, or supportive environment in the cities and territories. In a number of cases, we see some chaotic development near a natural attraction and often lack of any infrastructure at all, which discourages and depresses the tourists. That said, the attractions themselves are quite unique,” Vladimir Shchur, Head of the Primorye Territory Tourism Agency.

“There are three key sets of problems (in cruise tourism – ed. note): legal and regulatory framework (we have 41 regulations and practically every one of them needs revising) <...> The second set consists of infrastructure: that includes wharfs and rest areas, and it is the shortage of wharf infrastructure that does not allow us to build one-week tours, for instance (an average cruise is one week all over the world, but ours are two weeks). <...> The third set of problems includes promotion, marketing, and demand generation,” Zarina Doguzova Head, Russian Federal Agency for Tourism.

Investment is needed to develop infrastructure because the projects are quite expensive

“As part of a national project, the Government of the Russian Federation had set the challenge of building infrastructure on a radically new level and such high-quality facilities are quite expensive. The CapEx of such projects is very high and their economics depend on a huge number of circumstances, starting with the weather and all the way to the current geopolitical situation,” Anton Perin, Senior Managing Banker, Real Estate Project Management and Asset Management Unit, VEB.RF.

Inbound tourism is experiencing a crisis, which causes financial flows to the industry to shrink

“We should keep inbound tourism in mind; it is good money <...> Right now, the inbound flow has dropped 30 times <...> Tourist agencies that work with inbound tourism have been shut down for a year and a half <...> People are afraid to travel and cross national boundaries all over the world. We understand that the pandemic is still here. Large western tourist agencies are afraid of putting together mass charter programmes, especially to those countries where they do not understand the situation with the pandemic and its rules,” Andrey Ignatiyev President, Russian Tourism Union.

SOLUTIONS

Creating and carrying out a master plan may help to optimize the growth of the tourist industry

“A master plan gives an investor an understanding of the strategic development of the territory and an understanding of investment lots,” Zarina Doguzova Head, Russian Federal Agency for Tourism.

“What measures does the master plan provide for? A competently managed tourist flow, a controlled and intelligent tourist flow. Right now it is chaotic. On the basis of data collection, we can manage it <...> Thus, by creating these centres throughout the entire republic, we create a transportation infrastructure, we build roads specifically to these destinations, we have opened air travel within the republic,” Oleg Khorokhordin, Head of the Altai Republic.

Financial assistance for investment

“The fact that the Russian Federal Agency for Tourism has adopted the first resolution on subsidized bids is a game changer. We are already seeing investors become active from the point of view of project preparation,” Anton Perin, Senior Managing Banker, Real Estate Project Management and Asset Management Unit, VEB.RF.

Creating a unified image and design code of a city may increase its tourist attractiveness

“In that regard, for the purpose of maintaining the cities’ historic image and building a stylistically unified, supportive city environment, we need to expand the design practice and implementation of documents that regulate the 3D spatial character of development, that is the tourist code of a city centre <...> For that purpose, we need to ensure that a system of planning development and management of tourist territories is created <...> It is impossible to improve tourist itinerary in a city environment without building an aesthetically attractive image of city streets,” Vladimir Shchur, Head of the Primorye Territory Tourism Agency.

Stepping up advertisement campaigns abroad may increase inbound tourism flow

“We should still work on this type of tourism; we should carry out international marketing promotions abroad and work on international exhibits,” Andrey Ignatiyev President, Russian Tourism Union.

Tourism: A New Era of Hospitality

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