A socially oriented non-financial development institution and a major organizer of international conventions, congress, exhibitions, business, social and sporting, public, and cultural events.

The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of international conventions; exhibitions; and business, public, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, and helps foster social entrepreneurship and charitable initiatives.

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‘Tourism and the Hospitality Industry’: New Investment and Technological Opportunities for the Sector
5 June 2021
10:00—11:15
KEY CONCLUSIONS
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For the first time in the industry, we now have a system of instruments, not one, not two, but several groups of interrelated state support measures, which I am certain will allow us to correct mistakes, build up the industry, and make tourism become an important non-resource sector of the economy that generates huge socioeconomic effects for our country and directly affects the quality of life of our citizens — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

The problem of transport accessibility has now been resolved. Now we have a lot of work to do on the product in order to assemble it technologically, sell it on platforms in two clicks, communicate with the customer in an understandable manner, position it, and teach local business to work according to the standard — Taras Demura, General Director, TUI Russia.

People are the main thing in ensuring tourism. We need to rapidly train people and provide training in professions related to the hospitality industry based on the Far East and network programmes. We are actively working on this now because if we don’t do so, these plans will only remain on paper, of course — Vladimir Solodov, Governor of the Kamchatka Territory.

Tourism cannot only be developed with federal support, by the federal centre, or solely by the regional authorities, or local authorities, or only through the efforts of business. At any event, it needs to be a consolidation of efforts — Alexey Tsedenov, Head of the Republic of Buryatia.

ISSUES
The tourism industry is generating a net loss for the country

At present, tourism is generating a net loss for the country of roughly 20% of the foreign trade balance. That’s a lot of money. The net minus for each year without multipliers is tens of billions of dollars. That’s roughly 100,000 jobs for every billion dollars, according to economists’ calculations — Tatiana Veller, Investment Director for the Hotel Industry, Industrial Financial Group Safmar.

The hotel business is not generating revenue for the budget

We have an enormous number of hotel rooms in the country. More than a million rooms. The problem is that there are more than in Turkey and almost as many as in China. But these are all mini-hotels, which make up 65% of the rooms. These are even micro hotels because most of them have fewer than 19 rooms. Do you think it’s possible to create a competitive product on this basis? 75% of hotels work on a simplified tax system because they are small. They don’t generate revenue for the budget. The remaining 25% are mostly sanatoriums, which don’t generate budget revenue, either — Tatiana Veller, Investment Director for the Hotel Industry, Industrial Financial Group Safmar.

Investors are reluctant to invest, including due to seasonality

It’s very difficult for any reasonable investor to find a reason to invest in tourist or physical infrastructure in Russia, if its profitability is close to zero, and it’s even difficult to talk about the payback period. Today, according to the Federal State Statistics Service, for the nineteenth year, the operating profitability of hotels is less than 3%. This is actually kind of ridiculous, as we all understand. There are many examples in the world where tourist centres offer investors a return on capital of 20% or mor — Tatiana Veller, Investment Director for the Hotel Industry, Industrial Financial Group Safmar.

All our efforts and instruments of the national project will be focused on ensuring that our infrastructure works year-round. We will strive to be year-round in order to overcome the seasonal factor and the low income of investors associated with this seasonality, which in turn directly affects the quality of service, the level of remuneration, and the prestige of working in the tourism industry [...] Investors are much more willing to build hotels in business centres, where there is still a clear-cut seasonal fluctuation — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

Lack of quality hotels

We are seeing a huge shortage of high-quality modern hotels, with the possible exception of Sochi. Almost the entire Krasnodar Territory is experiencing an acute shortage of such hotels, as is the entire Crimean Peninsula, where there are very few hotels with the high quality of service that our tourists want to receive today. And, of course, such popular destinations as Altai, Baikal, the Russian North, and Karelia – an appropriate price-quality ratio is not taking hold there precisely because there are not enough high-quality modern hotels — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

In many places [in the Far East and the Arctic], the principle of ‘vacationers are responsible for their own vacation problems’ still remains [...] The price-quality ratio is even quite wild for Moscow residents, who are rather sophisticated travellers — Alexey Chekunkov, Minister for the Development of the Russian Far East and Arctic.

Different levels of customer service in the regions

There is a problem that we need to solve. That is above all [...] the product itself and its packaging at the local level [...] What we have seen is that [...] there are several companies operating at the local level that have very different ideas about service and about how sightseeing tours should be conducted. One company spends an hour on a tour, while another spends five hours on the same tour, as they speak about different things and there are different levels of transport — Taras Demura, General Director, TUI Russia.

Outdated legal framework

Today, the legal framework for tourism is very old. Tourism currently operates under a 1996 bill. We understand that today we are in a different dimension, in a different time, so we really need a legislative framework for the operation of the entire tourism industry — Boris Paikin, Chairman of the State Duma Committee on Physical Culture, Sports, Tourism and Youth Affairs.

The tourism industry is reluctant to work in regular special economic zones

Today, the advanced special economic zones that are operating in the country cater to the industrial cluster. And we have already looked at the legislation from this point of view. It’s very difficult to fit tourism into these advanced special economic zones. Practically impossible — Boris Paikin, Chairman of the State Duma Committee on Physical Culture, Sports, Tourism and Youth Affairs.

Farmers lack opportunities to earn money from tourism

Farmers are generally having a quite difficult time today. If we look at the European economy, farmers abroad receive about 30% of their funds from tourism. Our farmers don’t have this opportunity today because as soon as they start conducting tourism activities, the inspection authorities immediately show up, and this is where it all ends — Boris Paikin, Chairman of the State Duma Committee on Physical Culture, Sports, Tourism and Youth Affairs.

Regions face heavy burden with low benefits from tourism

If we are dealing with natural areas, we can see what role municipalities play and what a colossal burden they have. And they practically get nothing for it [...] We see hundreds, thousands, and millions of people who come to ski resorts and can break their legs – this is a very heavy burden [...] There are a lot of people, a lot of garbage, various burdens, and practically no taxes and no incentive for a municipality to deal with this — Alexander Klyachin, Chairman of the Board of Directors, AZIMUT Hotels Company.

SOLUTIONS
Create a concept for the country’s development and the master planning of a high-quality territory

The first instrument that we are introducing into the national project is the creation of a concept for the country’s development and the master planning of a high-quality territory, clusters, and the resorts that we will create. We also face the task of making a tourism master plan for the whole country for which we will have to complete a preliminary version by the end of this year. It will be a conceptual document in which all the key points of tourism development will be interconnected — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

Concessional lending for investors

The second instrument is preferential loans for investors to build new modern hotel facilities. This is a support measure that we will launch this year [...] We would like to support natural and resort areas using the interest rate — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

Support small and medium-sized business

Through grant support, we would like to support small projects that are of great importance to millions of travellers [...] Going forward, at the expense of grants, we will be ready to support the development of modular hotels – camping, car campsites, glamping, various observation platforms, and sanitary zones along the routes — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

Battling seasonality

Tourism cashback is still operating in somewhat of an anti-crisis mode this year. Starting next year, it will also become more focused, concentrated, and targeted and work specifically to support the offseason. In addition to an important social mission, tourism cashback has a very important economic objective – to expand the wings of the season — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

In terms of the season, the key objective is that we won’t be able to do anything until we extend the season from the 2–3 months that we have now to at least 10 months — Vladimir Solodov, Governor of the Kamchatka Territory.

Create a comfortable social environment through tourism infrastructure

Tourism infrastructure is the foundation for creating a comfortable social environment in territories and cities as well as a comfortable life for local residents. We have everything here: transport, energy, ecology, medicine, safety, tidying up the appearance of historical centres, trade, and, of course, a huge number of jobs — Zarina Doguzova, Head, Russian Federal Agency for Tourism.

Double the number of rooms in the Far East

We really need to double the number of rooms. Today, the Far East has about 2,000 hotels [...] Of that number, only 10% have at least one star, and the average number of rooms is 25 per building. So, they are very small facilities [...] We need to build new, larger, and better facilities. We are doing this — Alexey Chekunkov, Minister for the Development of the Russian Far East and Arctic.

Improve transport accessibility

Over the past year, the main problem that has hindered the development of tourism traffic has been resolved, and that is transport accessibility. We all know that flights, especially long-distance flights – to Baikal, to the Far East – were quite expensive compared with the prices of flights to the Atlantic, Brazil, and so on. Now, thanks to the charter subsidy programme, we can cut the ticket price in half. This is especially important in regions where the frequency of regular flights is not so high — Taras Demura, General Director, TUI Russia.

Unify tourism services in the regions

At present, we see that our main task is to create so-called service level agreements for hosting companies and to unify their work. And our task is to teach local host companies how to work in a consortium. Because when a charter arrives with 350 seats, you need uniform standards for buses, sightseeing tours, and customer experience. And not a single small company that hosts [such tours] in the region can handle this. So, we want to consolidate the efforts of local businesses, standardize them, and provide the client with a customer experience of the same quality — Taras Demura, General Director, TUI Russia.

Create tourism advanced special economic zones

It’s better today to come up with new laws and new federal legislation specifically on tourism advanced special economic zones. This will provide the opportunity for both business and the government to invest money and build agricultural clusters and everything that is necessary for tourism in a short time — Boris Paikin, Chairman of the State Duma Committee on Physical Culture, Sports, Tourism and Youth Affairs.

Create a rural tourism law

As of today, we have already passed the bill in the first reading. I think that we will adopt it at this session. This is rural tourism [...] The draft law on rural tourism lifts these barriers and makes it possible to use farms as hotels, without having the foundation that is required for, say, city-type hotels. This completely simplifies and makes it possible for rural tourism to develop — Boris Paikin, Chairman of the State Duma Committee on Physical Culture, Sports, Tourism and Youth Affairs.

Digital products will help bring in tourists

Some 95% of tourists travel using digital platforms. And without a digital path, even with a good product, you won’t get it [...] As soon as the pandemic dies down and the borders open to foreign tourists, we need to have a very good competitive offer and products. And right now, domestic tourists will help create this product — Olga Suslova, Director for Strategic Partnerships, Google Russia .