Domestic resorts do their best to attract the Russian tourists

Domestic resorts do their best to attract the Russian tourists

Expert Reports  

According to experts, the prospects for further growth of the Russia’s domestic and inbound tourism depend on the implementation of an ambitious project of creating year-round seaside resorts.

The Russian tourists spend over $35 bn annually to travel abroad and enjoy their vacations at various resort cities abroad. The Russian tourism industry intends to compete for this niche. The federal project dubbed 5 Seas should become a flagship one with the plans to create new year-round world-class resorts by 2035 on the coasts of the Black, Azov, Baltic, Caspian, Japanese seas and the shore of Lake Baikal. These resort areas should have up to 75 thousand new additional hotel rooms to accommodate up to 10 mn people more. The value for money factor should make it possible to attract not only the Russians, but also foreign tourists from India, China, Southeast Asian countries, and Arab states to the new Russian resort areas.

Dmitry Vakhrukov, Deputy Minister of Economic Development of the Russian Federation, spoke about this during a round table in the Upper House of the Russian Parliament dedicated to the development of tourism in the regions. The talk was about several ambitious projects to be implemented, including the St. Petersburg Marina sea resort, the White Dune in the Kaliningrad Region, the Primorsk resort on the Azov Sea coast, the New Anapa project on the Black Sea coast, the Caspian coastal cluster in Dagestan, and new resorts in the Primorsky Territory, the Crimea, and Lake Baikal. The plans are to build various hotels, balneological and hot-spring centers, yacht marinas, and centers for water and wind sports. The year-round operation of the resorts will be possible through the construction of water parks and heated swimming pools, as well as the creation of infrastructure for winter sports and recreation and various activities. Additional tourism anchors will be the future entertainment centers, eco- and ethno-parks.

According to the Ministry of Economic Development, the projects on the shore of Lake Baikal, the Caspian Sea, in St. Petersburg, and the Crimea are in progress. The projects in Kaliningrad, Vladivostok and Zaporozhye are ‘lagging behind’. But there are already interested investors; the task is not just to attract them but to choose the right investors, experts say.

Indeed, tourism has recently become one of the fastest growing industries; the pre-Covid level of demand for travel services has already been exceeded. According to statistics, the number of domestic trips around Russia and inbound tourists coming to our country is steadily increasing. Last year, almost 84 mn trips around Russia were made, up 14 percent compared to 2022. Against this background, the tourism industry has fully recovered and is actively attracting investments.

In 2023, the Russian businesses invested over 800 bn rubles in tourism projects, which is up 30+ percent compared to 2022 and 2.4 times more than in 2019. Twelve and a half thousand new hotel rooms were put into operation, up 10 percent compared to the previous year. At the same time, the number of rooms in hotels with stars increased by 18 percent.

To date, the tourism support program covers the projects for the construction of hotels and amusement parks in 63 regions of Russia, and 55 regions receive preferential loans for the construction of tourism facilities. This year, the preferential loan portfolio is about 800 bn rubles. Over 180 hotels with 57 thousand rooms are currently under construction; a number of hotels will be put in operation this year, and the peak of commissioning will be in 2027-2028. These are mainly 3-star hotels and higher category ones; these are the accommodation facilities in great shortage in the country.

Taking into account the current demand for hotels, a program for the construction of modular hotels financed from the budget in 2023-2024 (18 bn rubles) has also been launched. As part of this program, an additional 14.5 thousand rooms are expected to appear in modular accommodation facilities this year.

At the same time, projects are under implementation to support the construction of engineering and transport infrastructure facilities required for the development of tourism in the regions. In 2022-2023, the Ministry of Construction allocated 11.6 bn budget rubles for 25 electricity-, gas- and water-supply facilities and the transport infrastructure for the tourism projects in the Republic of Adygea, the Kamchatka, Perm and Primorsky territories, the Voronezh, Kemerovo, Penza, Tver, and Yaroslavl regions.

The new Tourism and Hospitality national project that is currently under development should give a significant acceleration to the development of the domestic tourism industry for the period 2025 through 2030. The plans are that it will use the existing support mechanisms proved to be efficient, in particular, the program of preferential lending for the construction of hotels, year-round amusement parks, mountain ski resorts, and water parks.

In addition to preferential loans and the construction of modular hotels, a uniform subsidy for financing tourism projects should be of importance; since this year, it will replace five different subsidies. Now, each region has the right to determine its ‘growth points’ that require priority funding. When the project is supported by the Ministry of Finance, the size of the subsidy will be increased from 6 bn to 9.5 bn rubles per year, and the competition will be held this year for 3-year financing, so that the regions could comprehensively plan the development of their tourism sector. The total amount of funds for the national project is expected to exceed 400 bn rubles.

The plans already exist to build at least 9 mountain ski resorts, 10 water parks, and 3 large amusement parks in Moscow, the Leningrad Region, and the Republic of Altai. This list will be increased significantly.

According to experts, adding the production of domestic tourist equipment required for mountain ski resorts, amusement parks, as well as tourist buses and cruise ships (that are in shortage now) to the national project of the federal program are among other important issues.

The industry is also experiencing a serious problem in staffing. Considering that the tourism industry employs 1.1 mn persons now, at least 400 thousand employees will be needed additionally taking into account the high growth by 2030, of which 50-80 thousand should be qualified personnel requiring special training. Experts propose to involve the Ministry of Education and Science and the Ministry of Labor to solve this problem by developing new educational standards and programs in the secondary vocational and higher education establishments.