11 September 2023

Inbound Tourism: Challenges and Opportunities in a New Reality


Strengthening friendly ties between countries through the development of inbound tourism

“We are celebrating the 75th anniversary of the establishment of diplomatic relations between the USSR and the Union of Myanmar. Needless to say, the establishment of economic, political, and commercial relations between the countries brings with it new opportunities for cooperation in a variety of sectors that benefit the development of both nations, and that includes tourism [...] Of course, it is important to promote tourism between the two countries to strengthen relations,” Union Minister of Hotels and Tourism of the Government of Republic of the Union of Myanmar Thet Thet Khine.

“Cooperation in tourism has always been an important part of humanitarian exchanges and business cooperation between China and Russia. As Chinese President Xi Jinping has noted, tourism plays a cultural role in strengthening friendship, and it is an important force behind the promotion of economic development, besides being the best way to strengthen a sense of closeness between the people of China and Russia [...] In February of this year, Russia was included in the list of the top 20 countries for Chinese outbound group travel. Both sides have consistently upheld the visa-free policy for group tours. I am confident that this strategy will help us attract even more tourists [...] Together we will strengthen further cultural exchange and deepen cooperation in tourism,” Deputy Minister of Culture and Tourism of the People’s Republic of China Lu Yingchuan.

“We travel to improve cultural relations and the relationship between our countries. We want to share experience and work together in different areas. We want to resolve major problems on different levels,” Mayor of the City of Cebu, Republic of the Philippines Michael Lopez Rama.

State support has made tourism possible in Russia following the coronavirus pandemic and sanctions

“Unfortunately, the pandemic and sanctions have impacted tourism negatively. But I will say right away that thanks to the amount of attention the President of the Russian Federation Vladimir Putin and federal authorities have been showing to tourism, the Russian industry has thrived, with inbound tourist flow reaching great heights,” Deputy General Director of Fun&Sun Aleksandr Sirchenko.

“It’s true that COVID has created many problems, but it has also somehow managed to redirect the focus of the tourism sector inwards, towards the country’s own resorts, its own hotels, and towards existing opportunities and limitations. As a result, we exceeded pre-COVID levels by 8% last year, and the first six months of this year have seen an increase of 17%. So first, we can talk about a rapid recovery in the domestic tourist flow. But the truth is we have not yet reached the limit of our full potential,” Minister of Economic Development of the Russian Federation Maksim Reshetnikov.



The tourist attractiveness of Russia has not been sufficiently promoted globally

“I think if we want foreign tourists to fall in love with our country, we need to do something very simple – we need to get them to come here at least once. Because those who come here [...] uncover a completely new reality. I think we’ve probably fallen short in this respect – we need to be more active in spreading the word and promoting our country on foreign markets. And we do understand this, and it’s on the agenda for 2024,” Minister of Economic Development of the Russian Federation Maksim Reshetnikov.

“We need to take a well-rounded approach to promoting Russia. We need a brand, an image that foreigners can understand, and a promotional programme in general. It’s a crime how little we are spending on promoting the country on the international market at present,” President of the Russian Union of Travel Industry and General Director of National tour operator “Alean” Ilya Umansky.

Inbound tourism remains unprofitable for Russia despite a growing tourist flow

“Despite the impressive results in terms of revenue, the industry as a whole is losing money. And the unfavorable balance continued to grow despite a growth in revenue, and despite a constant increase in the number of tourists. In 2019, we hit minus USD 25.2 billion [...] Russia is among the three countries with the highest negative balance of trade: only China and Germany surpass us in this respect. It should be noted that in 10 years we have accumulated a negative balance in tourism to the tune of minus USD 264 billion [...] I think our only goal should be to right the trade balance. If we do not keep this goal squarely before us, inbound tourism will only harm us,” President of the Russian Union of Travel Industry and General Director of National tour operator “Alean” Ilya Umansky.



Improving state measures in support of inbound tourism

“It’s obvious that additional support measures are needed [...] We need systemic measures more than anything. Firstly, we would seem to need a separate tax system to ensure entrepreneurs embarking in this business can invest efficiently. Secondly, we believe access to favourable financing is needed. The need to create a private capital market to attract free money for investment has already been raised. We need all sorts of investment funds that could serve as a source of cheap investment, longer-term, low-cost funds and venture capital investment,” President of the Russian Union of Travel Industry and General Director of National tour operator “Alean” Ilya Umansky.


“Several programmes are currently underway in the country to increase the number of available rooms. First of all, they concern large hotels capable of providing a high standard of service. […]

A programme is currently in place for the construction of 28,000 hotel rooms [...] At the same time, a programme for modular hotels has proved to be extremely effective [...] But existing programmes fall short, and so now, President of the Russian Federation Vladimir Putin has called for us to work with the Government and, with the approval of the Ministry of Finance, to increase the modular programme by another RUB 10 billion [...] So we’re preparing a programme for another 20,000 rooms under Resolution No. 141 [dated 9 February 2021 ‘On Approving the Rules for granting federal subsidies to Russian credit institutions and the VEB.RF state development corporation in compensation of income shortfalls on loans granted at a preferential rate to investors for investment projects necessary for the sustainable development of domestic and inbound tourism, the creation and development of tourist clusters promoting the development of domestic and inbound tourism, and on amending the Regulations on the Government Commission for the Development of Tourism in the Russian Federation’], in order to, shall we say, ensure room for growth in the construction and creation of new hotels in the years to come,” Minister of Economic Development of the Russian Federation Maksim Reshetnikov.


For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.


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