An Analysis of Development of Domestic and Inbound Tourism in Russia

An Analysis of Development of Domestic and Inbound Tourism in Russia

Amit Kumar (Kurukshetra University, India) and Anastasia Legashova (Independent Researcher, Greece)
DOI: 10.4018/978-1-5225-0708-6.ch016
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Abstract

One of the most promising sectors in the global economy is Tourism, yet in Russia, the sector's potential is far from fulfilled. Tourism should be at the heart of the core priority areas of Russia's economic development, particularly true in view of the current economic slump. Russia has no shortage of regions with visibly high potential for developing tourism, yet there are a number of problems, characteristic of Russia, which impede its progress: malnourished tourism coupled with an unsophisticated infrastructure, a shortage of personnel, weak marketing, a gloomy business climate, and a lack of adequate regulatory frameworks. Be this as it may, the slump, rather than being a hindrance, should be considered a fresh opportunity for the Russian tourism sector. Russia has been ranked 45th in the latest edition of the biennial Travel and Tourism Competitiveness Report, improving its performance by 18 points from its 2013 ranking of 63rd. The ranking, which includes 141 countries, is compiled by the World Economic Forum and Strategy Partners Group every two years, and assesses “the set of factors and policies that enable the sustainable development of the Travel and Tourism (T&T) sector, which in turn, contributes to the development and competitiveness of a country.” In 2013, the WEF cited hefty prices as one of the main disadvantages of the Russian tourist market. The availability of natural and cultural heritage sites has ensured additional points for Russia in the overall ranking; in these areas the country ranked 34th and 21st, respectively. Tours to Russia have become more affordable following the recent devaluation of the ruble – the value of the national currency against the U.S. dollar has fallen by 44 percent since May 2014. As a result, accommodation in hotels has become markedly cheaper. In addition, the consultants noted an improvement in air links (22nd). The present research is an attempt to analyze the development of domestic and inbound tourism in Russian Federation.
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Introduction

One of the most promising sectors in the global economy is Tourism, yet in Russia, the sector’s potential is far from fulfilled. Tourism should be at the heart of the core priority areas of Russia’s economic development, particularly true in view of the current economic slump. Russia has no shortage of regions with visibly high potential for developing tourism, yet there are a number of problems, characteristic of Russia, which impede its progress: malnourished tourism coupled with an unsophisticated infrastructure, a shortage of personnel, weak marketing, a gloomy business climate, and a lack of adequate regulatory frameworks. Be this as it may, the slump, rather than being a hindrance, should be considered a fresh opportunity for the Russian tourism sector. At 29 million trips, 2013 saw the highest number of inbound trips to Russia over the review period. Arrivals keep showing double-digit growth in Russia. First of all, this is a result of the aforementioned federal target programme called Domestic and Inbound Tourism Development ‘2011-2018’ (Federal Agency for Tourism, 2013). Active promotion of Russia as a travel destination influenced the growth of arrivals. A number of sports events of global importance such as the Winter Olympic Games in Sochi, World University Games in Kazan, Formula One race in Sochi and others positively influence growing interest in Russia as a destination country. However, Russia still faces problems with less than optimum tourism infrastructure in the country. Lack of budget hotels, information centres and other tourism service are still considered to be significant drawbacks for the development. Moreover, many inbound visitors—especially those from countries outside of the CIS region and Baltic States—still perceive Russia as a mysterious and dangerous destination and its two largest cities Moscow and St Petersburg have well-earned reputations as expensive places to visit.

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