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Attending the meeting were Presidential Plenipotentiary Envoy to the North Caucasus Federal District Yury Chaika, Head of the Republic of Dagestan Sergei Melikov, Senator of the Russian Federation Suleiman Kerimov, and Head of the Derbent Municipal District Rustambek Pirmagomedov. Taking part in the meeting via videoconference were deputy prime ministers Alexander Novak and Dmitry Chernyshenko, Presidential Aide Maxim Oreshkin, Healthcare Minister Mikhail Murashko, Economic Development Minister Maxim Reshetnikov, Transport Minister Vitaly Savelyev, Finance Minister Anton Siluanov, Minister of Construction, Housing and Utilities Irek Faizullin, Head of the Republic of Ingushetia Makhmud-Ali Kalimatov, Head of the Kabardino-Balkarian Republic Kazbek Kokov, Head of the Karachayevo-Circassian Republic Rashid Temrezov, Head of the Republic of North Ossetia-Alania Sergei Menyailo, Head of the Chechen Republic Ramzan Kadyrov, Stavropol Territory Governor Vladimir Vladimirov, Head of the Federal Agency for State Property Management Vadim Yakovenko, General Director of Tourism.RF Corporation Sergei Sukhanov and General Director of Kavkaz.RF Andrei Yumshanov.

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President of Russia Vladimir Putin: Good afternoon, colleagues.

We are in Dagestan, in Derbent, one of the most ancient cities, or rather the most ancient city in Russia. We recently celebrated its 2,000^th anniversary. Meanwhile, the first settlements began here 5,000 years, which is confirmed by archaeological excavations that were made in Soviet times, I believe, starting in 1971. There is the oldest mosque in Russia. We visited it today as well.

Much is being done, but my colleagues and I came here today to discuss what else should be done in the country to develop domestic and inbound tourism. It is no accident that the growth of domestic tourism here in Dagestan and in Derbent in particular is showing record figures.

In addition to what I just mentioned – the ancient origins of Dagestan and Derbent and the cultural sights generally, there is also stunning nature and many other attractions that are too numerous to list right now.

Of course, the hospitality of the Caucasus is common knowledge. Its traditions also include the local drinks, which are being produced at a more consistent pace now. This is, of course, also part of tourism, and honestly, it’s only natural on vacation. I hope we will also discuss this component today, which has economic implications as well.

In short, we are in a great place today. It is great for both recreation and work. Our agenda includes issues on the development of the nation’s tourism industry, primarily in our North Caucasus. We will look at the goals in this area as well as at the specific projects. The city’s chief architect told us about this today – they have a good young team; their eyes are shining and these projects are already underway. True, as far as I understand it, it is necessary to think about sources of funding at this point to make sure these ambitious plans – and they are ambitious indeed – are translated into reality.

I have already mentioned the rapid development of domestic tourism in our country – the dynamics are very good.

Of course, external factors have had an impact. I am referring to the various sanctions and restrictions imposed by the authorities of some states and the Russophobia they are encouraging. In fact, they have themselves eliminated their countries from the list of attractive tourist destinations for our people, thereby losing money, reputation and the trust of their partners.

However, the main point is that our tourism industry is entering a new level and becoming more appealing. Much is being done to develop transport infrastructure, resorts, hotels, restaurants and cafes, and to improve public spaces and implement numerous business initiatives and projects in this area. As a result, more people are choosing Russia as their holiday destination.

I would like to repeat that we are seeing greater demand for domestic tourism, and this is good impetus for developing the tourism industry as such, as well as related branches and regions.

I would like to emphasise that the common goal of the state and of domestic businesses is to improve the quality of tourist services and infrastructure, to strive for the highest standards of comfort, accessibility and security, to proceed from the needs of people with diverse incomes – youth as well as people of different ages and generations, and of course, families with children.

Importantly, Russia has everything it needs for the confident, long-term and effective development of its tourism industry. I will probably mention things that are common knowledge – we have a tremendous historical, cultural, nature and recreation potential. We probably don’t have many competitors in the world in terms of the diversity of our nature and climate. Hence, we can offer trips, routes and types of education and health-building tourism to suit literally every taste.

The main point is to consistently fulfil our plans including those under the Tourism and Hospitality Industry national project.

We have already made many important decisions. I will mention among the most significant ones, concession loans for the construction of hotels – 87 new facilities with 25,000 rooms are under construction due to this support measure alone.

At the St Petersburg International Economic Forum, I instructed the Government to expand this programme with emphasis on the most in-demand class of hotels – three or four star hotels, and also to support the construction of year-round entertainment parks, aqua parks, ski routes and resorts.

I also suggested increasing support for the construction of so-called modular, pre-fabricated but still comfortable hotels by 11 billion rubles over the next two years.

In the meantime, I would like to draw the attention of both lawmakers and the Government to the fact that unfortunately many of the decisions we discussed have not yet been implemented. I am referring to VAT exemptions for tour operators. I know that the Government has prepared the draft bill on this. It is important to review and adopt it before the current spring session of parliament ends. This will allow tour operators to be reimbursed for VAT quicker, including their backdated tax payments from January 1 of this year.

We need to focus more strongly on other areas that we discussed at the State Council Presidium last September on the development of domestic tourism, and that we subsequently reviewed in detail at several meetings.

I would also like to ask you to step up the drafting of the concept for the development of automobile tourism. For many people, this is the most convenient way to travel. It is necessary to expand road infrastructure and services. Incidentally, this is also important for the further development of the increasingly popular recreational activity, tourist hiking trails. Private tour business websites and regional and federal internet platforms should carry more information about this.

One more important and very promising goal is to fulfil the ambitious projects on creating year-round sea resorts designed to accommodate at least 10 million people a year. We should raise the bar as high as possible and set the most ambitious targets. The ratio of price to quality for the recreation of our people should not be below the highest world standards. It would be better if they surpass them, as we have said more than once.

Now let’s turn to the development of tourism in the regions of the North Caucasus Federal District. I am pleased to note that last year, this district became the leader in tourist visits. Dagestan, where we are now, is ranked first in this respect.

Our North Caucasus has a unique climate indeed. We have a network of sanatoriums, hotel complexes and recreation sites in Kislovodsk, Pyatigorsk and other famous centres.

Today, I would like to ask you to report on the progress in the already launched programmes on the development of existing resorts, such as Arkhyz in theKarachayevo-Circassian Republic, Elbrus in the Kabardino-Balkarian Republic and Veduchi in the Chechen Republic.

In addition, the construction of the Mamison resort was launched in North Ossetia in 2020. Let’s see what progress has been made there, and also review the infrastructure plans for two new resorts – Armkhi in the Republic of Ingushetia and the beach spa – the Caspian Coastal Cluster – here in Dagestan.

I would like Transport Minister Vitaly Savelyev to report separately on the development of transport infrastructure, including air and railway connections and border checkpoints.

I know that much is being done, and it is important to keep this pace. Thus, the R-217 Kavkaz motor road on the way to Veduchi is undergoing major repairs and a road is being built to the new Mamison resort.

Traffic was recently launched on the Aksai and Krasnodar bypasses. Such projects are also needed for Derbent, Makhachkala, Khasavyurt and a number of other big cities in the North Caucasus. We just discussed this with the Head of Dagestan [Sergei Melikov] on our way here to this meeting.

Air service is a separate issue. A new domestic terminal at Vladikavkaz International Airport opened for service last year. There are plans to rebuild the airports at Makhachkala and Grozny. All this is very important for facilitating tourist access to the North Caucasus.

Citizens of other countries also come to our resorts. It is necessary to make all the formalities for them as easy as possible. We are interested in doing this not only for them but also for ourselves, for the development of the tourism industry. I am partly referring to the possibility of applying for an e-visa for the main tourist destinations. We need to put this desired, modern and convenient mechanism into service as soon as possible.

Finally, today we will review separately the goals for the comprehensive development of Derbent. Otherwise, why are we here?

Let’s go to the agenda. I would like to ask Maxim Reshetnikov to speak first. Go ahead, please.

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Vladimir Putin: Thank you.

I would like to thank everyone who prepared this meeting. And I would like to repeat that the development of both domestic and inbound tourism infrastructure is proceeding at a good pace. At the same time, it is important not to deviate from the goals and plans we have set, not only to meet the deadlines, but also to control the quality of the solutions. This applies to all road construction and repair issues, expansion of checkpoints, and introduction of capital and prefabricated modular hotels.

In addition, as we agreed, and today we have also talked about this, it is necessary to quickly launch electronic visas for the most popular destinations for tourists entering our country.

I agree with the proposals made today to develop resorts in the Northern Caucasus Federal District, including in the region of the Caucasus Mineral Waters. Governor of the Stavropol Territory Vladimir Vladimirov has just spoken about this. I want to approach the terms and sources of funding very carefully. Just now, the Minister proposed to distribute everything; yes, where it is justified, then, of course, we must do it, but we need to tread, I repeat once again, carefully.

What must be done? We need to be absolutely, 100 percent sure that these investment conditions will be complied with in full, and if they are not complied with, then the property must be returned to the original owners. Here, we need to calculate everything very carefully. Otherwise, instead of building hotels, they will start building apartments, and there will be no gain from the resort fee, because there will be no resort fee. People will simply keep these apartments. But that is not a tourist facility, it is not a hotel or a resort. So, I would like to ask you to think through all these details. But the work must proceed in such a way that, on the whole, in five years, all facilities requiring major repairs are put in order according to standards.

Now to the development of Derbent. I would like to ask the Russian Government, as the head of the republic requested earlier, to update the development plans together with the region, without postponing this, and to make all the necessary adjustments regarding the deadlines and financing. Here, private investors may have what seems to be technical questions, but they are substantive and practical. I am asking you to think this through, perhaps adjust the deadlines a bit, but on the whole the sources must be determined, the goals we have set for ourselves must be implemented, and these plans and schedules must be agreed upon.

And the last thing. Of course, I support the joint proposal made by the Ministry of Economic Development and the head of the Republic of Dagestan: to maintain an increased coefficient for applying a deduction from the excise tax for the 2024–2026 period, if grapes are used to produce drinks with full-cycle technology.

It is also important to consider Dagestan’s successful experience in signing investment agreements with enterprises with this tax deduction. This means that wine producers – as you said, Mr Melikov – must take on certain obligations, namely, to use additional funds from tax incentives to implement their investment plans, including laying new vineyards and developing their material and technical base. So these funds, which, in fact, will be received from the state because they will not pay taxes, must be invested in developing the industry. Though I understand that Dagestan is already among the leaders, if not the leader, in the development of winemaking in general. This approach would benefit both the state and the manufacturer.

I would also like to say in conclusion that I consider all these plans absolutely realistic, not only because they have already picked up a good pace and are yielding good results, as can be seen from the growth of various areas of tourism industry both across the country and here, in the North Caucasus region, but, among other things, all this implementation takes place amid positive economic dynamics. The latest data just make us work even more actively.

What do I mean? The latest data show – in addition to low inflation, which persists – a historically low level of unemployment year on year, from May to May, the growth of the processing industry by 12.8 percent; the country’s GDP over the same period grew by 5.4 percent, and finally, real wages grew by 10.4 percent.

All these positive trends must, of course, be preserved, and everything must be done to ensure that they persist, and are used to implement our plans to develop domestic and inbound tourism that we have spoken about today.

Thank you all very much. I wish you success.