I celebrated my first year living in Russia yesterday, and although I would not yet consider writing this blog in Cyrillic – even though I have made enough progress since приятного аппетита! – , I would like to share a few facts about tourism in this country, which remains largely unknown despite its numerous treasures!
For now, a few facts and numbers, the boring part!… but stay tuned, as I am planning many trips to “the province”, which I promise to document with many pictures and tasting reports of course!
- Over 24 million international tourists from 224 countries in visited the country in 2016 (Federal Security Service of Russia)
- Since 2016 Russian authorities strongly encourage regions to attract investors
- Organization of “mega” events, such as the Confederation Cup in 2017, and the World Cup 2018
- The goal is to double the hotel capacity by 2025, by focusing on development of regions sur as the North Caucasus area for mountain skiing, and Crimea.
The government’s goal to increase the visitors numbers is mainly due to macro economic factors, mainly the devaluation of the ruble by 55%, the GDP decline by 3.5%, and the unemployment rate which began to rise since 2016.
Government has also issued regulations on travelling aboard for certain categories of public servants such as military personnel, policemen…
The plain truth is that it has become increasingly pricey for most Russians to travel out of their country, and many of them are now starting to rediscover their own regions.
St Petersburg (see statistics below) and Moscow, the two main destinations, have clearly benefited from this, but some new options are increasingly becoming appealing :
Lake Baikal, Siberia
Sayan mountains
Kamchatka Peninsula’s
All eyes will undoubtedly focus on the next big event to take place in Russia’s main cities, the World Cup 2018.
The organization of the Confederations Cup this year, amidst security and organization concerns, finally proved to be a successful “rehearsal test” in terms of infrastructure, security and special visa policies for foreign spectators.
However hoteliers in the luxury segment will have to carefully balance occupancy and room rates strategies, so as not to appear too hungry (greedy :)) for high room rates, as suggested in the St Petersburg’s statistics below… this short term strategy could have a lasting and negative effect on the visitor.
A look at St. Petersburg
St. Petersburg, the main attraction point in the country, has had an interesting growth in the last couple of years :
2016 was the best year recorded so far for St. Petersburg tourism in terms of overall number of tourists and profitability. 2017 will close with even higher figures due to FIFA Confederations Cup held in May and June.
About 7 million tourists visited the city in 2016, 4.7 millions are Russians who started to opt for internal destinations.
The growing trend is confirmed by other figures. The Sapsan train’s ridership on the St. Petersburg — Moscow line increased by 37% to 4.7 million trips. The Allegro train (St. Petersburg — Helsinki) also saw a 7% increase in number of passengers.
Hotel statistics collected by Knight Frank consultancy also give positive figures of occupancy rates and revenue per room across 3*, 4* and 5* hotels, KF’s report here.
The Hermitage museum attracted 4 million visitors which is a bit less than half the St. Petersburg’s population (9 million).
Cruises recorded a slight decrease of 5%, close to half a million visitors arrived at the Passenger port of St. Petersburg onboard 209 cruise ships. In 2017, the port is going to become an entry point for 543.000 guests (250 ships), a 19% increase to 2016.
St. Petersburg Pulkovo airport served 13 million passengers in 2016, according to preliminary data, a 5% decrease caused by drop in international flights.
2017 is on the way to being another great year for tourism, with an estimated 7.5 million tourists.
Hotel rates, as a result, have increased on average by 30% for the high season 2017, latest statistics compiled by JLL somehow show this strategy has backfired for luxury brands (-2.7% occupancy against 2016) , favoring upper midscale hotels (+1.4% occupancy against 2016). Both segment benefited from a +9% in ADR. Full report here .
Interestingly, that St. Petersburg’s authorities are making great efforts to attract more visitors from China, and have opened a special tourist information office in Beijing. From 150.000 Chinese guests in 2016, the authorities predict, the traffic will be 200.000 in 2017.
All in all, the future looks reasonably positive for the industry in Russia, however certain challenges will still have to be overcome in order to facilitate the additional influx of foreign tourists into the country :
- tourist visas regulations
- lack of modern infrastructures in most regions (except for Moscow and St. Petersburg)
- lack of training for hotel staff
- use of English language fairly limited
Let’s also hope, in the near future, that the generally pessimistic media coverage on Russia will shift to a more advantageous one, highlighting the hidden gems this enormous and extremely varied territory has to offer!
Thank you for reading, and stay connected for more hospitality stories, I will be reporting from Sumba, Indonesia, next week…
