The Pandemic As an Opportunity: HSE Experts Evaluate the Potential of Domestic Tourism in Russia
The tourism industry has been recognized as one of the hardest hit sectors of the economy due to the introduction of restrictive measures to counter the spread of the pandemic. Thus, experts estimated that the income of domestic hoteliers would fall 2.7 times by the end of 2020. But the pandemic also provides opportunities for Russia’s domestic tourism market, according to a recent report by HSE University experts. The researchers estimate that the market could potentially generate up to 1.5 trillion rubles.
The coronavirus pandemic and lockdown have hit the global travel and tourism industry hard. For 2020, the industry will have earned about $396.37 billion — about 42% less than in 2019. The crisis reached its peak in the second quarter of last year. In particular, the number of foreign tourists entering Russia and Russian tourists leaving its borders decreased by an average of 98 and 96 times compared to the same periods in 2017-2019. According to estimates of the World Travel and Tourism Council (WTTC), about 108 million people employed in the tourism industry worldwide lost their jobs, and in Russia, 1.1 million industry employees lost their jobs.
HSE calculations based on Rosstat data showed that by the end of 2020, hotel revenues will have decreased by 270%. According to Sberbank data (Sberindex), in the period from mid-March to mid-July, consumer spending on travel agency services and hotels decreased by 65-81% compared to the same period in 2019.
But the news isn’t all bad. Domestic tourism turned out to enjoy quite a demand: the authors of the study, relying on data from an in-line sampling survey conducted from November 21 to December 11, note that 21.7 million people traveled within Russia in 2020. The weighted average cost of these trips per person amounted to 36,400 rubles. Most of them stayed in hotels and hostels, while a significantly smaller portion stayed in sanatoriums
During the pandemic, resorts in Krasnodar Krai and Crimea were most popular, attracting 26% and 17% of Russian travelers, respectively. St. Petersburg, Mineralnye Vody, and the Kaliningrad Region each attracted about 5-7% of tourists, while other destinations drew respective shares of less than 4%.
70% of Russians preferred to arrange their travel plans independently, 33% traveled by car, and 84% were satisfied with their vacation
The government last year tried to stimulate domestic tourism with a programme that reimburses travelers part of their travel costs. To do this, it was necessary for travelers to pay for their travel using their Russian Mir debit cards. The survey showed, however, that 95% of tourists did not participate in this programme. Some reported that they do not use their Mir cards, while others had been unaware of the programme.
Assessing the prospects for domestic tourism in 2021, HSE experts believe that the number of citizens traveling within Russia could grow to 27.5 million. In this case, the total spending on travel would increase from 790.5 billion rubles to about 1 trillion rubles. And the upper limit of the potential of the domestic tourism market after the pandemic is, according to the calculations of the authors of the study, 1.5 trillion rubles.
Experts believe that a platform approach to the digital transformation of the industry is needed: housing, transport, sightseeing, information, and all other services need a single organizational system. This model, in particular, would involve the participation of state and municipal organizations in all segments of the ecosystem on an equal basis with private organizations and individuals, as well as the active involvement of self-employed citizens in the industry who work as personal guides, tour guides, translators, accommodation providers, transport service providers, and so on.