When Russia’s influence on the Ukraine government of Viktor Yanukovych got challenged by a kind of rampaging western hegemony, all Europe should have studied more closely these relationships. Now, over a year in, the 2015 summer tourist season will probably be a disaster.
Regardless of who we lay the blame on for the current west-east detente disaster, the end result is Russians are out of the tourism picture for needy countries across Europe and other regions. Maybe Vladimir Putin did influence the Kiev leadership to turn down an EU/NATO bid, but about now most Greek hoteliers are ready to yell; “So what?” It’s impossible to turn back the clock, but most sane people in the world are wondering; “What didn’t the Americans leave Ukraine alone?” And this, from an America wondering the same thing. Anyone has to have known Moscow would never allow NATO room right next door!
Worst fears are upon us, when parts of Europe look like abandoned hotels in Liberia – via Mark Fischer
This aside, here’s where we are.
Quotes from various media should suffice to paint this dismal picture:
- Cyprus Mail: “The Cyprus tourism Organisation (CTO) said it was doing everything possible to restrain the downward trend displayed by the Russian market, the island’s second biggest after the UK.”
- Business Standard on Goa tourism: “During the last season, Goa received 21-24 charter flights from Russia a week. This year we are seeing 14-15 flights a week, and the aircraft do not have a full load.”
- Business Insider: Hard times have fallen on Pattaya, a beach resort about 60 miles southeast of Bangkok, as Russian tourists cancel their vacation plans amid the collapse of the ruble.
- The New York Times: “Hoteliers, taxi drivers and ski stations in France’s wintertime hotspots and beyond say a tourism boom by big-spending Russians in recent years is about to melt away because of Russia’s economic crisis.”
- The National: “Dubai hotels have started to feel the pinch from the slowdown in Russian and European visitors as discounted deals in resorts like Sharm El Sheikh attract the more price-conscious tourists.”
- China-Europe: “In eastern and southern Finland, reservations (of Russian tourists) are down 15 percent. Statistics Finland estimates it may be as much as 30 percent in some cases,” Timo Lappi, head of the Finnish Hospitality Association MaRa.
- Stern: “Russian tourists are staying away, and our agricultural industry is affected.” Greece Prime Minister Alexis Tsipras
- The Thanhnien News: Vietnam Airlines said it began reconsidering its direct flights to Russia due to the declining number of passengers.
I could go on, almost indefinitely. Even the European Commission, in its understated eurocrat way, created yet another report (PDF)where action was needed instead. The real picture is best illustrated using a map of Russian tourism penetration such as the one provided in the commission report. While overly conservative, the map does show how every business related to a poor Russian economy is affected. The 2013 figures suggest most European businesses stand to lose upwards of 5% in revenues.
Countries in red will see hotels close in 2015 if sanctions are not lifted. Crete hotels, as an example, cannot afford 7% in lost revenues.
From a point of objective reason, one has to wonder at the mindset that allowed this current east-west situation to escalate so. Whoever in the European Commission, or any of the capitals of Europe who deemed expansionism into Ukraine more important than survival… Well, at least the current level of sanctions and negative diplomacy over anything less than massive genocide, it seems ludicrous. Just who will benefit, if tourism and other businesses founder? The whole point is, Europe has come to count on integration of Russians into the scheme of business and leisure, and now the rug has been pulled out. The graphic below from the EU report shows this equivocally. After all, who is going to replace these tourists?
Growth of outbound Russia travel – European Commission
In summary, it’s not rocket science to realize many European businesses are going to be crying; “Let’s go back to before the Ukraine crisis!” Reading further into the European Commission report on the situation, Russians contributed more to growth in tourism than any other three nationalities combined in the last decade. Even the United States and Canada seem to have shot themselves in the feet over losing almost all inbound Russia tourism. Worse still, if Russia and Ukraine enter into some full conflict mode, tourism in Europe especially will be devastated. Even an increased sanctions scenario will spell catastrophe for any business unable to withstand a 5% marginal loss. Now if this is not catastrophic news enough for hoteliers, only World War III seems more disastrous for this someone in the know.
An abandoned hotel near Nice at Le Pont du Loup – Via John Robinson
Unless Europe’s dreams of hospitality booms rely on waves of Americans hitting Paris, Rome, and Geneva this Summer, if Ibiza is not going to have the biggest English speaking beach party in history, then it seems clear somebody in Brussels needs to re-evaluate just how bad the EU needed Ukraine included. As for NATO, anyone knows military organizations need an enemy.
Meanwhile, I’ll interview some hoteliers and tour people and let you know if I am right or wrong. Stay tuned.
Additional photo credits: Russian tourists on the beach courtesy robin robokow