Money should be spent wisely

Almost 460 bn rubles will be allocated in Russia for the Tourism and Hospitality national project until 2030. According to Deputy Minister of Economic Development Dmitry Vakhrukov, the resource until 2030 has been determined - this is almost 460 bn rubles. At the same time, more than 200 bn will be allocated for this project in the next three years. The Russian parliament has completed the consideration of the budget for 2025 and for the planning period of 2026-2027; on November 27, the main financial document was unanimously approved by the Federation Council.

The draft document approved by the State Duma assumes that Russia’s budget expenditures on the Tourism and Hospitality national project in 2025 are estimated at 43.992 bn rubles. This is stated in the explanatory note to the draft federal budget of the Russian Federation for 2025 and for the planning period of 2026 and 2027.

In particular, the funds will be used to create modular non-capital accommodation facilities, provide a single subsidy to the budgets of the constituent entities of the Russian Federation aimed at achieving the indicators of the state program Tourism Development, preferential lending for investment projects required for the sustainable development of domestic and inbound tourism, and the creation and development of tourism clusters.

The draft budget also included expenses for the federal project Five Seas and Lake Baikal, which will amount to 6.2 bn rubles in 2025, 16.4 bn in 2026, and 17.3 bn rubles in 2027.

What will the funds be spent on? They will be used to increase the number of hotel rooms and provide a single subsidy to regional budgets for achieving the indicators of the Tourism Development national program, as well as for preferential lending for investment projects aimed at the sustainable development of domestic and inbound tourism. In addition, the budget money is expected to be used for financing the creation and development of tourism clusters, as well as for preferential lending for investment projects to develop ski resorts, year-round amusement parks and water parks.

Earlier Chernyshenko, Deputy Prime Minister of the Russian Government, said that over 400 bn rubles had already been attracted with the help of the preferential lending program for developing the tourism infrastructure, which were set to be used for the construction of 27.5 thousand new hotel rooms because of a shortage of full-fledged hotels in popular tourism locations. In addition, the roadside services for auto tourists are also expected to be developed.

In turn, the Ministry of Economic Development and the Ministry of Industry and Trade will work on a special ‘road map’. The task set by the document is to provide the tourism industry with all the necessary means of transport - from cruise ships and airplanes to buses. Much attention will be paid to foreign tourists who want to visit Russia and it will be easier for them to get electronic visas and air traveling will be subsidized.

It is worth mentioning that at the beginning of April this year, more impressive figures were also announced. Thus, Sangadzhi Tarbayev, Chairman of the State Duma’s Tourism Committee, said that the consolidated budget of about 700 bn rubles was approved for the investments in the development of tourism industry in Russia for the next three years, and this figure was more than that for the preparation for the 2018 World Cup in Russia.

By the way, the deputy drew attention to the fact that the main “investment point” should be a tourism infrastructure, since “the Russians started traveling around our country but they are provided with very poor service, a low level of infrastructure, and their disappointment can be catastrophic for our tourism industry.” That is why, the official stated, it is necessary to do investments in promoting the “supply” by Russia’s tourism industry rather than promoting the “demand”, so that the product offered to tourists could “meet their expectations, be at affordable price and of high quality as we declare.”

According to Roman Arseniy, Head of the Department of Tourism and Hospitality of the Russian International Academy for Tourism (RIAT), an expert in the hotel classification, there is a shortage of good quality accommodation facilities in Russia. “It is clear that it is necessary to invest in construction of roads and urban infrastructure; as for resort or historical cities, many their infrastructure facilities need renovation. The aesthetic component during the traveling and rest is one of the key ones,” the expert believes.

According to Roman Arseniy, the personnel training is the second important issue on which budget funds allocated “for tourism” should be spent on.

“Employees of hotels, health resorts, tour agencies and travel companies should undergo advanced training and retraining and understand that their interaction with the tourists makes a favorable image of the region and gives an opportunity to attract tourists and consumers and also to inspire people to come again and recommend their friends and acquaintances to make this trip”, the expert added.

It is worth noting that the sums of investments are really impressive taking into account that in 2022 alone, the domestic tourist flow increased by 16.7 percent, or by 10 mn people. And these travelers really do not have enough offers of tourist routes and attractions. Therefore, it is planned to build year-round amusement parks, as well as water parks and new ski resorts. The construction of modular hotels will also receive a boost and their funding will be provided, which will allow the implementation of another 470 tourism projects.

According to Chernyshenko, the tourism sector makes 2.6 percent of Russia’s GDP and the government hopes to double this contribution to the country’s GDP.”

Of course, such figures are not record-breaking. However, a 30-percent contribution of tourism in the country’s total GDP indicates that the country’s economy is very dependent on the growing tourist flow. A 5-percent contribution is a rather low figure and it means that revenues from tourism, in general, do not have a significant effect on the country’s economy. In France, for example, tourism industry contributes 8 percent to the GDP, while this figure is 9.2 percent in the United States. And in Turkey and Egypt, popular among the Russian tourists, these figures are 17.2 and 26.6 percent, respectively.