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State Council Presidium meeting

August 17, 2015, Yalta

Vladimir Putin held a State Council Presidium meeting in Yalta on developing Russia’s tourism sector.

President of Russia Vladimir Putin: Good afternoon, colleagues.

We are meeting here in Crimea today to discuss development of our country’s tourism sector, both domestic and foreign tourism.

Let me note right away that we will not look at issues concerning the health resort sector. This is a separate issue that requires a discussion of its own. With respect to this sector, I ask the Government and the regional authorities to make a prompt stocktaking of all health resort facilities and analyse the problems that exist, and then we will examine these matters in detail at a later meeting.

Now, turning to the subject of today’s discussion, we know that the tourism sector is developing rapidly around the world and accounts for a growing share in national economies. It is no surprise then that competition for tourists is fierce. We need to attract visitors from abroad, and at the same time give incentives for our citizens to want to spend their holidays here at home, in our own country.

I won’t go into the examples right now, but there are many countries in North America, Asia and Europe, where up to 80 percent or more people holiday in their own countries.

Speaking frankly, we lagged behind seriously for a long time in this competition. This was above all due to poorly developed tourism infrastructure and insufficient quality of service. Things are changing now, slowly, but there is improvement. The number of people spending their holidays within Russia increased by nearly 30 percent in 2014 and reached 41.5 million people. What’s more, inbound tourism also increased by 16 percent.

We realise, of course, that the current economic situation, price situation and exchange rate differences have contributed to this. It has become more expensive to holiday in many foreign countries if you convert the cost into rubles. But it is also clear that Russia’s tourism industry is making changes for the better.

Many regions have become serious about developing the tourism sector and are actively building or modernising tourism facilities and accompanying infrastructure. It’s enough to look at Sochi, which, without any exaggeration, has become a world-class year-round resort city.

Overall, the number of hotels in the country has more than doubled. During the Soviet period, we had 7,000 hotels, but today we have around 16,000. More than 400,000 people are employed in the hotel sector. In other words, this is becoming an increasingly important sector in the economy.

Here in Crimea, the Kerch ferry crossing capacity has increased over the past year. The Governor will tell us about what is happening now. He already gave me some good figures before, pleasing results in transport capacity. Simferopol’s airport now has links to 50 cities around Russia, with flights both day and night. You know that we have good plans for this airport’s reconstruction, and I am sure this will be done.

The example of many cities and regions shows that you can develop the tourism sector with good result only by taking a comprehensive and systemic approach that takes all aspects into account. This includes high quality service, convenient logistics, a wide choice of hotels in all price segments, strict environmental and nature conservation standards, and making cultural and historical heritage open and affordable for people. Here in Crimea, I think this is especially important and of particular interest.

As I said, we need to take into account all different aspects, so as to make it comfortable, interesting and advantageous to holiday in Russia. This way, the tourism sector will bring in tangible budget revenue and create new jobs, thus serving as a catalyst for socioeconomic growth in the regions and opening up new opportunities for single-industry towns, rural areas, northern and Arctic regions, Siberia and the Far East. This is also very relevant for Crimea, of course.

Continued development of modern tourism infrastructure is one of our priorities now. Here, we need to make use of the opportunities offered by the federal targeted programme Development of Domestic and Inbound Tourism in Russia (2011–2018). This programme is being implemented on the basis of public-private partnerships, with around three rubles from extra-budgetary sources invested for every ruble of budget money. But the budget funds allocated for 2015–2018 are considerably smaller than what we originally planned.

We need to look at additional incentives for business and for people ready to invest resources in long-term projects and programmes. I ask you to analyse this and prepare proposals in this area.

Another issue is that of developing the tourism and recreation special economic zones. Colleagues, I would like to hear from you today on the problems and proposed solutions in this area.

I would add too that the priority development areas being created in the Far East offer good opportunities for attracting private business into the tourism sector in this region, which has a lot of tourism potential. Of course, we also need to look together with the regions at how to best put to use the 2018 Football World Cup’s legacy to boost tourism infrastructure development.

We already have good experience in this area from our organisation of the Winter Olympics in Sochi, the Universiade in Kazan and other big events. We should make broader and more active use of this experience.

Next, we also need to make travel on all kinds of domestic transport routes more affordable, especially for students, schoolchildren, senior citizens and other groups entitled to benefits. Cheaper tickets, including for people living in remote parts of the country, will help to diversify and considerably increase tourism flows.

For reference, transport costs currently account for a sizeable share – around 50–70 percent on average – of the cost of holiday packages.

We need to work constantly on improving the level of service we offer tourists, and this means continuing to certify and set standards for tourism sector facilities in accordance with world standards. Protecting tourists’ rights is particularly important. We are still seeing far too many violations in this area.

Travel agencies can play a key part in helping to raise the quality of tourism sector services. More than 80 percent of holiday packages are sold today through travel agencies. We clearly need to ensure that these companies are reliable and transparent and rid the market of fly-by-night firms and swindlers of various kinds.

The introduction of a common register of travel agencies is on the agenda today. One of the public associations of travel agencies could be responsible for overseeing this work. Establishing a register of this kind would help to ensure oversight and transparency of the whole technological cycle – from producing to selling the tourism product – and would make it possible to set high professional and corporate standards within the industry and increase agencies’ responsibility towards their customers.

In order to attract foreign tourists, it might be worth looking at further simplifying some visa rules. We could expand the practice of visa-free travel for groups, for example. We could introduce this for all of the BRICS countries. We already do this with China, through the agreement on visa-free travel for group tourism.

Overall, Russian and world experience shows that liberalising visa rules almost always brings an increase in the number of tourists. This was the case with Israel, for example. As soon as we relaxed the rules, the number of Israelis visiting Russia has more than doubled. The number of people from Turkey visiting Russia is up by 41 percent, and there has been a 40-percent increase in visitors from the Republic of Korea.

Of course, we must promote more actively the opportunities for holidays and travel in Russia. We need to do this here at home, and abroad, using the media and new information technologies to keep promoting our tourism products, open new tourism offices abroad, and tourism and information centres here in Russia. People here and abroad must be able to obtain full and timely information on Russia’s tourism potential.

Colleagues, I have outlined several of the domestic and inbound tourism development issues we need to address. Today, we will discuss many other matters too, of course, including improving the legislative base in this sector, encouraging small and medium business, and creating a barrier-free environment, which is particularly important.

I am sure that with a competent, involved and modern approach we have all the opportunities we need to make the tourism industry a competitive and effective sector of Russia’s economy. Our task now is to put these opportunities to the best use possible.


August 17, 2015, Yalta