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. Last Updated: 07/27/2016

Tourists to Russia Fall by One-Sixth

MTTour operators are struggling to deal with spiraling prices, a lack of hotel space and the country's image problem.
The slide in the number of foreign tourists visiting Russia appears to be accelerating, with the number of people entering the country on tourist visas falling by almost a half-million in 2005 to 2.3 million, according to government statistics released Thursday.

Last year's fall of around 17 percent follows a 9.2 percent decline in visitor numbers in 2004, according to the State Statistics Service, as tour operators struggle with spiraling prices, a lack of hotel space and the country's intractable image problem.

"We expected a fall, but we were still a little distressed because it is accelerating," said Irina Tyurina, a spokeswoman for the Russian Tourism Union, whose members claim two-thirds of the Russian market for incoming tourism.

Tourists are staying away mainly because of high prices, followed by a lack of modern tourist-class hotels and the country's poor image abroad, according to a poll by the union of 115 tour operators.

"The numbers are falling because these problems are not being solved," Tyurina said.

The union's member organizations say numbers of foreign visitors have fallen even more drastically than the official statistics show, by 20 to 25 percent in the last year, she said, adding that the government was doing little to help.

"The first problem is prices, and the government cannot control that -- but it is not even trying. Even with regard to monopolies like the railways and the high-profile museums that all tourists want to visit," Tyurina said.

To develop the industry, the government has proposed earmarking certain regions for tourism development, giving them the status of special economic zones that would benefit from state support. But it is far too early to say how successful this will be, Tyurina said.

The price of tours sold in the West has grown by 20 to 25 percent annually over the past two years, due to inflation and increasing hotel prices in Russia, said Sergei Sinitsyn, adviser to the chairman of Federal Tourism Agency, a body that answers to the prime minister.

Several well-known tourist hotels in the capital, such as the Moskva and Rossiya, have recently closed their doors, leaving few budget options for tour operators.

And while the product is becoming more expensive, the country's marketing budget is still paltry compared to with rivals.

Russia spends 3 million euros ($3.6 million) per year on advertising itself abroad as a tourist destination, according to the Federal Tourism Agency. Finland, by comparison, spent 26.5 million euros last year, while Mexico spent almost 120 million euros, according to the World Tourism Organization.

One issue clouding the figures is the fact that official statistics measure the number of foreigners arriving in the country on tourist visas, thus including any unscrupulous businesspeople traveling as tourists.

According to the State Statistics Service, the total number of foreigners entering the country was unchanged last year, with the number of foreigners entering on business visas up by 18.4 percent.

Although business travelers on a short stay occasionally use tourist visas, the practice used to be more common, and there have been no recent changes in visa procedures that would have affected the latest numbers, said Sergei Kostin of visa agency RBV Consulting.