Tourism In Russia, A Silver Lining For Ruble Nose Dive
MOSCOW — Russia placed 45th in the world on the most recent Travel and Tourism Competitiveness Index, a ranking of 141 countries compiled twice a year by the World Economic Forum and Strategy Partners Group. This represents a significant improvement over the previous year, when it ranked 63rd.
Industry analysts agree that the driving factor in this jumb is the steady devaluation of the ruble, which makes travel to Russia much more affordable for foreigners.
Since May of last year, the ruble has lost 44% compared to the dollar — which means that hotels have become substantially cheaper. In fact, the World Economic Forum noted in 2013 that one of the reasons Russia's ranking wasn't better then was because hotels were excessively expensive.
Russia receives extra points for both its natural and cultural attractions. In those areas, the latest index ranked the country 34th and 21st respectively. It is also relatively well-served by airlines, another key rating factor.
But Russia also has some serious strikes against it when it comes to tourism. Worst of all, perhaps, are its visa requirements, for which it places 120th worldwide in terms of tourist friendliness. Russia also has a low level of international openness, and the consultants who conducted the ranking consider the country's business climate "unfavorable." Russia is also near the bottom of the pack in terms of security.
The report clarifies that a large number of the data points were collected before the events the Ukraine crisis began. "We won't be able to fully evaluate the effects of macroeconomic and geopolitical factors until the next rating," explains Strategy Partners Group's Aleksei Prazdnichnikh.
Tour operators have long complained that Russia's strict visa demands are one of the primary factors preventing its tourism industry from growing. "Waiving visas for Europeans would double the number of tourists in the country, but right now that's not possible," explains Vladimir Kantorovich, vice president of the Russian Tour Operators Association. He says that tour operators are often unable to have even minor rules relaxed for their customers.
"For example, the Russian Ministry of International Affairs recently announced that citizens of India would no longer have to present an original version of their invitation letter, but in reality the consulate still requires that piece of paper," Kantorovich says, referring to the document that international tourists are required to have to get a Russian visa.
Russia saw 28.4 million international arrivals in 2013, with each spending an average of $423. In total, tourism spending reached $11.98 billion. By comparison, the number of international arrivals in Spain the same year was 60.7 million, and those tourists spent a total of $62.7 billion.
According to the Russian Tourism Agency, there were 25.4 million international tourist arrivals in the country last year (10% less than in 2013). Tour operators began noticing a major drop in interest around the end of 2014, as the conflict in Ukraine heated up and tour reservations dropped to almost nothing.
But now market actors are more optimistic. According to Kantorovich, unless the ruble rises in value, the tourism sector will have at least as many customers in 2015 as in 2014.