what stimulates and restrains the incoming tourist flow to the Russian Federation

The contribution of tourism to Russia’s GDP should double to 5% by 2030, Russian President Vladimir Putin said in his address to the Federal Assembly on February 29. In addition to the growing domestic tourist flow, inbound tourism has also begun to show signs of recovery. In January-February, the total flow of guests to Russia increased by one and a half times, and in the summer season, tour operators expect a multiple increase. The revival was ensured, among other things, by the introduction of electronic visas, although the main problems have not yet been solved. Foreigners cannot use the usual payment tools; organizing a trip is accompanied by a lot of difficulties. So business does not expect tourist flows to return to 2019 levels in the coming years.

The Russian inbound tourism market is recovering. According to the FSB border service, in 2023 the number of foreigners visiting the Russian Federation increased by 9.2%, to 15.4 million people. The number of those who declared tourism purposes for their trip increased 3.3 times, to 670 thousand people. In 2024, the dynamics, according to indirect data, are improving. MTS Travel notes that in January-February, one and a half times more foreign subscribers registered in the MTS network than a year earlier.

Guests from the East

Growth is primarily driven by tourists from China. According to MTS Travel, in January-February their number quadrupled year-on-year, accounting for 11% of the total number of arrivals. Over the year, the number of visits from Saudi Arabia has increased fourfold, from the UAE by two and a half times, from India by two times, and from Iran by one and a half times. Summer is considered an indicative period for classic travel. Foreigners, according to the general director of the Dolphin tour operator Sergei Romashkin, begin to arrive in May. July-August in 2023, according to MTS Travel, accounted for 25% of all foreign tourist visits for the year.

Expectations for the 2024 season from the tourism industry are still positive. Mr. Romashkin says that the number of foreign tourist bookings has increased three to four times from the low base of 2023. General Director of Tari Tour Marina Levchenko expects that in the summer there will be 30–40% more guests; she notes bookings from China, Indonesia, Malaysia, and Turkey. Vice-President of the Russian Union of Tourism Industry Dmitry Gorin believes that the flow of foreign tourists will increase two to three times. Managing Director of Aeroclub Yulia Lipatova says that business demand for flights to Russia has increased by 32% this year.

Intourist representative Daria Domostroeva notes a threefold increase in demand. According to her, the flow from India is stimulated by direct flights and travel to other countries. Thus, “there are cultural ties between India and Uzbekistan, and after visiting this country, many tourists go to Russia,” explains Ms. Domostroeva. Also, according to her, people from Latin America, Europe and the United States are planning trips: “If five years ago American tourists were a common occurrence, now they are perceived as a positive signal.”

President of Cosmos Hotel Group Alexander Biba says that in the hotels of his chain in Karelia, the Murmansk region, Novosibirsk, Moscow, Yaroslavl and St. Petersburg, the number of foreign guests over the year has increased by 30–40%. But there is still a long way to go to pre-crisis levels. According to TravelLine, in January-February, foreigners accounted for 1.7-1.8% of all hotel bookings in Russia, while in 2019 they accounted for 8-9%.

Electronic entry

The impetus for the growth of entry into Russia was the issuance of electronic visas to citizens of 55 countries, which began in August 2023. The list includes EU countries, Japan, Turkey, China, India, Bahrain, Iran, Saudi Arabia, etc. The registration period, according to the Ministry of Economy, is up to six days from the date of submission of the application.

The consular department of the Russian Foreign Ministry clarified that from August to December 31, 170 thousand permits were issued. Sergei Romashkin believes that without electronic visas there would be two to three times fewer guests. The materials of the Association of Tour Operators of Russia (ATOR) say that before the Russian Federation suspended the visa-free regime with Turkey in 2016, tourists from this country often came to Moscow and St. Petersburg for weekends and electronic visas can restore interest in such trips. The department told Kommersant that in 2023, more than 90% of electronic visas were issued to citizens of ten countries, including China, Estonia, Germany, Turkey, India, and Saudi Arabia. In January-February, 70 thousand visas were issued.

ATOR Executive Director Maya Lomidze is confident that electronic visas have stimulated the flow of foreign guests to Russia, with a minimum of refusals. Although the questionnaire, in her opinion, “could be less than the current four pages.” Daria Domostroeva only knows about refusals associated with gross violations, for example, attaching erroneous documents. Although, Ms. Lomidze admits, the past experience of liberalizing entry rules into the Russian Federation also gave a more pronounced effect. Thus, the abolition of tourist visas between Russia and Israel in 2008 led to an increase in tourist flows in the first year by 80%, and in the case of the abolition of visas with South Korea in 2014 – by 30%.

According to Ms. Lomidze, the positive effect is offset by “geopolitical difficulties,” the lack of air traffic with Western countries and restrictions on foreign bank cards working in Russia. “A tourist planning a trip to the country must still have strong motivation,” she is sure.

Payment imbalance

In early February, Russian banks, as part of a project with the Ministry of Economy, began testing the issuance of bank cards for foreign tourists. The ministry did not specify the names of the banks to Kommersant, emphasizing that “the area remains sensitive.” But Kommersant’s interlocutor at the market calls the project meaningless: “It is impossible to transfer money from abroad to Russia, a tourist can only come with cash, go to the bank, get a card and put money on it.”

Without declaration, Kommersant’s source reminds, only $10 thousand per person can now be brought into Russia, which “is not enough for wealthy tourists from Middle Eastern countries.” Daria Domostroeva believes that we should be talking about at least $30 thousand per person: “In Russia there is almost no all inclusive format; tourists spend money not only on shopping, but also on food and other needs.” In addition, Ms. Domostroeva notes, the number of exchange offices is small and not everyone is ready to accept dollars. Yulia Lipatova adds that “the return to cash itself causes discomfort for many.”

Planning difficulties

Foreign tourists also lost their usual travel booking services in the Russian Federation. According to TravelLine, in January-February 2019, more than 94% of hotel bookings were made by foreigners through Booking.com, which stopped working with Russian properties in the spring of 2022. In January and February 2024, according to TravelLine, more than 70% of foreigners’ bookings were collectively provided by Acase.ru, 101hotels.com and Ostrovok.ru.

But not all Russian sites work with foreigners. Sergei Romashkin explains that to accept payments from foreign bank cards, “foreign structures are needed.”

OneTwoTrip says that tourists can book hotels with payment on the spot or using foreign cards through the foreign settings of the service. According to OneTwoTrip, in January-February the number of requests from foreign tourists increased by 40% year-on-year. Yandex Travels stated that they do not yet work with payments through foreign bank cards. General Director of MTS Travel Vadim Melnikov sees potential for Russian business in partnership with large foreign aggregators, including Chinese: “We are already conducting such cooperation, offering Bronevik.com inventory.”

Purchasing air tickets in the Russian Federation, according to Mr. Gorin’s observations, usually does not create difficulties; he considers the main problem to be the rise in prices of transportation. According to him, the average check has more than doubled since the beginning of 2022, to $2 thousand per person. Director of Marketing and Communications of Raketa Daria Zubritskaya speaks “in general about increasingly complicated logistics, which is why the duration of the flight can increase significantly.”

Unattainable results

Maya Lomidze notes that, although in January ATOR predicted an increase in incoming tourist flows in 2024 by 10%, now they look at the situation more positively: “Much depends on efforts to promote the country abroad, they look serious.” However, she is confident that even in the future we are not talking about returning the incoming tourist flow to 2019 levels. Then foreigners made a total of 32.9 million trips to the Russian Federation, of which 5.06 million were for tourism purposes.

Maya Lomidze notes that Asian residents actively travel to Europe, and travelers from Iran more often choose Saudi Arabia and the UAE. Before the pandemic, she adds, mainly older European tourists came to the Russian Federation, who rarely returned again, although, for example, most sightseeing tourists go to Italy several times. The influx of guests from some countries is also limited due to their internal problems. Daria Domostroeva explains that the activity of tourists from Turkey is negatively affected by the high level of inflation in the country.

Apart from China, for Russia, “in principle, there are no countries from which the tourist flow can recover to the level of five years ago,” believes Sergei Romashkin. Before the pandemic, he adds, Europe was the key market, and the Middle East was not seen as promising. According to Mr. Romashkin, now the Russian Federation, in fact, can be perceived as “a new player in the highly competitive tourism market; it will take at least five years to establish itself.”

Alexandra Mertsalova