15 May 2020 12:39

Russian Tourism Agency urges regions to give financial aid to tourism industry

MOSCOW. May 15 (Interfax) - The Federal Tourism Agency has appealed to the leaders of all Russian regions to provide financial support and tax breaks to regional tourism, a letter signed by agency head Zarina Doguzova shows.

The tourism sector has seen business plunge 95-100%, with lost revenue topping 1.5 trillion rubles, the letter, a copy of which was obtained by Interfax, said.

Facilities that require substantial, regular capital investment, including hotels, conference centers, resorts, retreats and spas and cruise ships have found themselves at the epicenter of the crisis. Up to 2.5 million jobs could be lost in the sector in the pessimistic scenario, so the priority should be preserve the industry's highly skilled workers and infrastructure, the letter said.

"The solution to this problem, in addition to actions taken at the federal level, should be the provision of the maximum possible measures of regional support (direct financing, tax and non-tax breaks) to tourism businesses, investors and initiators of new projects. It is clear that the restoration of the sector from scratch will be a far more costly and lengthy process than providing timely targeted aid to existing businesses. Therefore, it is extremely important to maintain the amount of regional budget allocations for tourism and if possible allocate additional funds for its development and promotion," the letter said.

Before the coronavirus pandemic, tourism was one of the fastest growing sectors of the Russian economy, the letter said. The tourism industry annual contributes $1.5 billion to Russia's exports, which is comparable to arms exports and is almost triple the amount of timber, copper, aluminum or nickel exports, the letter said.

After the reopening of international travel and the subsequent introduction of electronic visas in 2021, inbound tourism will see a substantial increase in foreign exchange revenue, the agency said.

After the lifting of coronavirus lockdown restrictions, the development of domestic tourism could make a substantial contribution to the recovery of regional economies, Doguzova said.

"The restoration of domestic tourist traffic will also help restart transport, culture, the entertainment sector, restaurants, retail - virtually the whole services sector. And, of course, along with its economic potential, domestic tourism has huge humanitarian potential, as it will enable many Russians to newly discover the country for themselves and their loved ones. In addition, the summer is coming, people are tired and want to simply relax, breathe fresh air and take their mind off things. Now is just the time to do this in Russia," Doguzova said.

She said the Tourism Agency is working on a plan for the sector's recovery and further modernization that calls for supporting investors, including through cofinancing of regional infrastructure projects and soft credit for construction and renovation of accommodation, increasing subsidies for growth of tourist traffic, a national marketing campaign and other measures.