Weaker Ruble Might Boost International Tourism in Russia

As ruble is weakening, tourists are seeing the chance to spend their ever rising currency in Russia.

MOSCOW, December 10 (Sputnik) – Moscow is becoming a cheaper tourist destination and one of the most affordable for foreigners in Europe due to the slump in the ruble’s FX rate, meaning that inbound tourist traffic might increase by 40-50%, according to some estimates. However, such positive effect of the weaker national currency might as well be negated by Russia’s unfavorable reputation in many countries of the developed world.

Russia has become a more appealing destination for international tourists, as its national currency has depreciated by roughly 40% this year. An average tourists’ bill, covering living expenses, foods and sightseeing in a daily estimate would account for 4,000 to 5,000 rubles ($75 to $95), as compared to cost of accommodation only in a hotel in Paris or Barcelona, reaching about 70 to 80 euros ($85-$100) a day, according to the data provided by Russia’s Association of Tour Operators (ATOR). Foods expenses would cost another 20 euros ($25) a day. Including transport and Moscow is almost two times cheaper than your average European capital, while other cities and towns of Russia are even more tourist-friendly in terms of pricing.

“A depreciated local currency always provides a major boost to the inbound tourist traffic,” Maia Lomidze of ATOR said as quoted by RG. “Weaker national currencies in several nations during the 2008 financial crisis contributed to a cheaper tourism costs in several European nations, attracting an influx of tourists and saving the day. Argentina, having experienced a default twice, successfully reorganized its economy based on inbound tourism,” she added.

At this point, Russia has a competitive edge over other tourist destinations, but it takes a lot of marketing and PR efforts to make a massive tourist influx a reality. Pricing policy is one of the most important tools to attract foreign visitors, and this tool is not working in favour of Russia now.

“A small private guest house in the town of Suzdal, very popular with foreigners, has rooms to let at a daily price of 3,000 rubles ($60). However, for the Christmas holiday season the price was raised to 21,000 rubles ($400) a day. There similar examples in other region,” Lomidze notes. Hence, it is very important for Russia’s tourist businesses to abstain from groundless hikes in pricing.

The second crucial point in boosting Russia’s tourist appeal is visa policies, which is the responsibility of Russia’s authorities. Looser conditions on issue of tourist visas would provide a significant support to the economic advantages that Russia has to offer to international tourists.

The third important factor is overseas advertising of Russia’s tourism industry. Currently, Russia does not have a single one offshore representational office for tourism, which means that tourism in Russia could be advertised via international presentations and exhibitions.

However, the head of Moscow’s Committee on tourism and hospitality, Sergei Shpilko, suggested that a weaker ruble would not make a significant impact on Russia’s tourism industry by boosting the amount of foreign visitors, as reported by Rusnovosti. The mainstream Western media have created an atmosphere of mistrust toward Russia, unprecedented since the Cuban crisis, Shpilko said, often affecting the decision of international tourists on whether to visit Russia.

The Head of Moscow’s regulator in tourism also added that even with a weaker ruble, Russia still faces tough competition with other affordable tourist destinations like the nations of Southeast Asia, Middle East and Latin America. Shpilko noted though that Christmas package tours to Russia would be advertised in London at consumer-friendly prices.

The largest amount of foreign tourists who come to Russia are currently from China. In January through September this year, some 920,000 Chinese tourists visited Russia, a 6% year-on-year increase. Germany, on the other hand, previously a leading tourist supplier, has shown an 8% decline in amount of visitors to Russia. Tourism from South Korea skyrocketed by 57%, with over 70,000 people visiting Russia this year. Japan added 4% in the number of tourists bound for Russia.