Tourism Growth Halted

For the first time in 7 years St. Petersburg city government has reported discouraging news on the tourism front: the number of visitors has stopped growing.

"Our results will at best repeat last year‘s figures," said Viktor Pakhomkov, deputy head of the External Affairs and Tourism Committee of the city government. In 2003, 3.12 million foreign tourists visited St. Petersburg, which was then a 15 percent hike from 2002.

In the meantime, some local hotels have improved their sales in 2004. Yana Lakizina, PR-manager of Grand Hotel Europe, said they had more guests this year than in 2003, and the tendency was for guests to stay longer.

Negative publicity
According to Sergei Korneyev, head of the Northwest branch of the Russian Union of Travel Industry participants (RST), two plane crashes, a series of blasts and the hostage tragedy in Beslan led to the cancellations for 20,000 foreign tourist groups planning a trip to Russia. Concurrently, St. Petersburg suffered a 20-percent decline in tourism from abroad.

"St. Petersburg and its region are considered the safest regions in all of Russia," Korneyev said. "But a terrorist attack typically affects the entire country, and not only the area where it happens."

"This year was not an easy one for all of us," said Luba Aprelikova, director of sales and marketing at Renaissance St. Petersburg Baltic Hotel. "The city was still living on the wave of the 300 year anniversary and getting large visitor numbers when the tragic events of Beslan shocked the world."

As a result, Aprelikova noted a decline in business, or corporate, tourism: "Russia was taken off the list of ‘incentive destinations‘ by some of the large international travel agencies."

Pakhomkov said that many trips to St. Petersburg were canceled at the last minute. "Several thousands tourists cancelled their reservations, and of course nobody can calculate the number of people who simply changed their mind about wanting to travel to St. Petersburg," he complained.

Poor funding
This year, St. Petersburg missed almost all important travel exhibitions abroad owing to limited funds. In 2004, the city budget for tourism development was cut by more than 80 percent: just 6 million rubles ($200,000) was allotted to promote the city. As a result, the city attended only 4 international tourism exhibitions, a far cry from the 18-22 events the St. Petersburg delegation was able to attend in previous years.

By comparison, Moscow‘s tourism budget this year stood at an enviable 310 million rubles, and the sum will be boosted to a handsome 900 million rubles next year, Pakhomkov said.

In the meantime, the northern capital will have to make do with same 6 million rubles again next year. "This is obviously wrong and a shame for the city," Pakhomkov said. "The industry brings from 10 percent to 12 percent of the city‘s total income - something like 100 billion rubles ($22 million)."

Balancing the books
Leonid Flit, general director of Nika Travel Agency, said a major transport company, able to respond to increasing needs of the local travel industry, should be created. "In the Soviet years, Intourist was doing fine, but now they can‘t cope with all the requests. They simply don‘t have enough buses."

Still another view stressed by many experts was the need to move official events from the White Nights summer season in order to allow more ordinary tourists to visit the city, and make the industry busier during the low season.

Gennady Belonogov, general director of Pulkovskaya Hotel, pointed to a comparison between St. Petersburg‘s modest 15,000 beds at local hotels and London‘s more than 300,000.

"The shortage is damaging the industry," he said. "The small hotels aren‘t helping it much. Nobody is building large hotels here because it takes about 7 years to repay the money invested, and people don‘t want to take risks. The city has to think how to make it more attractive for investors."

Belonogov added that potential investors expressed concern about a drastic gap in occupancy between the summer and the winter months. Low winter tourist numbers was an investor worry.

Security is still a major concern for tourists, and not just foreigners, but also Russian nationals traveling. Foreign visitors bombarded their hosts with complaints in the summer concerning poor security on the city‘s streets. Once out of the hotel, the chances of theft were high, tourists complained.

"Over the past several years, we have installed over 200 cameras in our hotel, and it has been a very efficient system," Pulkovskaya‘s Belonogov said. "But we are not responsible for the insufficient street patrolling."

Rachel Shackleton, general director of Concept Training, Development and Consultancy Services, believes security has to be focused on, with concrete actions needed to be taken by the city tourist committee to bring visible results.

"The situation needs to be addressed in a very serious way to defeat those few who are damaging the image of this city as a destination," Shackleton said.

Infrastructure ailing
Furthermore, experts point out that there have been no improvements to the city‘s infrastructure. There is still a big challenge in the process of receiving visas for Russia; it remains problematic to arrange tours to museums, which are overcrowded despite increased prices; traffic jams seem to be only getting worse.

"On the transportation front, I don‘t see any changes at all. There‘s been no real effort to structure parking or traffic systems to manage the increased flow of traffic," Shackleton said.

Thomas Noll, general manager of Corinthia Nevskij Palace Hotel, said many guests made complaints about the city‘s ailing infrastructure. "What we hear more often is how things are organized at Pulkovo airport, when you have to cue up outside the terminal in the cold winter temperatures in order to go through the security control," Noll said.

Attractive possibilities
Lyudmila Ivanova, director of the Association of Tourism Exhibitions, said Great Britain‘s annual profit from the tourism industry makes Pound3 billion ($5.79 billion), and this is what St. Petersburg should be aiming at, if not immediately, then in the near future.

"A Unesco report this year rated St. Petersburg at No.8 in a list of the world‘s most attractive destinations," Ivanova said. "We should be promoting the city much more intensively.

"Prague is visited by 12 million people a year, but the Czech National Tourism board is investing lots more into promoting the Czech capital than Russians do to promote St. Petersburg."

In Noll‘s opinion, the town‘s marketing and promotion are still in the nascent stages. "Currently promotion concepts are being developed by the Boston Consulting Group and TACIS to raise the city to a No. 5 most attractive destination in the world," Noll said.

"But once a good model is created, efficient cooperation is needed between the government and private enterprises to establish a effective marketing service for the city."

St.Petersburg Times, Galina Stolyarova

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