Tourism Chief Sees Increased State Role

The first moves of the former head of a private tourism company the government enlisted to revitalize the tourism sector shows that he believes in a stronger state role in the industry.

Vladimir Strazhalkovsky, former head of industry major Neva whose last post was with the abolished Physical Education, Sport and Tourism Committee, was appointed deputy minister for economic development and trade on July 14 and will become the head of the ministry's new tourism department.

The new minister announced at a news conference Friday that he already had an agreement with French hotel chain Accor for the construction of 10 new hotels, five in Moscow and five in St. Petersburg.

In another initiative, Strazhalkovsky said he has requested $3 million per year for this project plus $800,000 for organizing presentations to promote Russia abroad. This request is 35 times higher than the previous level of financing, he said.

Tourist industry leaders have hailed Strazhalkovsky's moves.

"Russia as a tourist destination has huge potential but will only be quoted realistically on the world market when someone invests money in its development. Companies can't do this f they don't have the turnover," said Alexei Zhegalov, general director with Vit-Inform.

"Only the state can do the advertising. This is something that all countries with an interest in attracting incoming tourism do," he said.

Marina Vladimirova, director of Kitezh tourist agency, said government investment in the sector should encourage growth.

"The fact is that even private funding is almost impossible to attract without a state guarantee," she said.

Strazhalkovsky has invited managers of several influential tourist companies to work with him. Although the new team may favor their former companies, Strazhalkovsky can be considered a highly placed lobbyist for the interests of the tour business as a whole.

And a powerful lobbyist at that f he is one of five deputy ministers who have direct contact with Economic Development and Trade Minister German Gref.

The new department will take charge of state-owned hotels even though Strazhalkovsky is unsure how many there are. "Our entire statistics system needs major changes. This is something else we'll be working on," he said.

The Economic Development and Trade Ministry took over administration of the tourism sector under a government resolution signed July 5.

Foreign representative offices of the former Physical Education, Sport and Tourism Committee will also come under the ministry's jurisdiction.

When the committee was created, a major part of the tourism sector was transferred to the overloaded and underfunded Health Ministry.

This happened because initially the government had no replacement for the old Culture, Sport and Tourism Ministry.

The Health Ministry is to retain the nation's 4,519 health resorts and sanatoriums, 60 percent of which have been privatized.