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The escalation of the Crimea crisis in March coincided with a “noticeable slowing” in the growth of tourism from Russia to many European countries, economic research out today (Thursday) shows.
Prior to the crisis, the Russian outbound travel market to Europe was expected to grow by more than four million visits between 2014 and 2016, but that forecast has been downgraded to 2.5 million.
Arrivals from Russia to Europe at the start of the year were expected to grow by around 10% but now the forecast has been revised down to 3%, according to the study by the European Travel Commission.
But if the political situation deteriorates and sanctions against Russia are increased, the ETC forecasts that tourism from Russia will fall by 5% in 2014 – a loss of one million visitors – and drop by 1.3 million in 2015. Despite a recovery of 1.2 million visitors in 2016, the crisis would cost destinations in Europe over one million visits overall.
Should things spiral into outright conflict, the forecasts are bleak – 2014 and 2015 will see a loss of two million visits from Russia and in 2016 the market would be down by nearly five million compared to 2013.
Furthermore, a conflict would produce indirect impacts that could jeopardise the eurozone’s economic recovery and negatively affect travel within Europe’s internal market.
The political crisis in Crimea, a weakening of Russia’s domestic economy, a decline in the value of the rouble to an all-time low against the euro and the imposition of sanctions, have combined to prompt a “marked change” in the choices made by Russian tourists, the ETC said.
Destinations experiencing the most painful falls include Germany, Italy, Poland and Spain. In contrast, Cyprus, Greece and Turkey have all seen a rise in Russian tourists.
The Turkish surge is most significant because it represents 11% of the whole Russian outbound travel market, and received more than four million visits in 2013.
“There are several possible explanations for this trend,” the ETC said. “First, Cyprus, Greece and Turkey offer good value for money due to a comparatively low cost of living and, in the case of Turkey, favourable exchange rates and no visa requirements.
“Second, they have a long track record of welcoming tourists from Russia. Third, unlike many other destinations, they adopted a lackadaisical view to imposing sanctions against Russia after the annexation of Crimea.”
The organisation’s executive director, Eduardo Santander, said: “Whilst growth in outbound tourism from Russia to Europe has slowed, it has slowed from a very healthy rate and it is still expected to be positive this year, despite the Crimea crisis.”
Travel from Russia has grown massively over the past two decades and Europe has been a major beneficiary. With 18.1 million tourist arrivals in 2013, Russia has grown to become Europe’s third largest source market.
Increasing prosperity in Russia has been spurred by a growing economy, freed up by market reforms and fuelled by the rising price of oil.
Consequently more and more people are exceeding the $20,000 income threshold, identified by independent advisory firm Tourism Economics as the point at which international travel becomes affordable.
ETC head of research, Valeria Croce, said: “The underlying fundamentals of outbound travel from Russia remain strong and the market is expected to deliver pent up demand in the medium to long term, especially to those destinations which maintain their presence in the market.
“In the past, the European tourism sector has proved remarkably resilient to different types of shocks, including political unrest, economic recessions and even terrorism.
“Despite the challenging landscape, the tourism sector is expected to confirm its role as key driver of Europe’s economy, growth and employment.”