Tourist destinations around the world are experiencing a significant impact on their economies as Russians stay home due to war-related sanctions, with possible long-term effects on international tourism.
This comes as European countries with Russian borders say they can ban all Russian tourists.
Russians were the seventh-biggest tourism spender in the world before the pandemic, spending $36 billion (£31 billion) a year.
Nicknamed “Little Russia,” Vietnam’s Nha Trang attracted large numbers of Russian tourists before the war. The resort saw a rapid post-pandemic recovery thanks to the return of Russian tourists in 2019. Russian tourists spent an average of US$1,600 per stay in Vietnam, while foreign visitors average US$900.
Vietnamese luxury hotels, previously popular with Russian tourists, are mostly empty or have been sold. The tour guide business has also been affected.
Nha Trang is not alone. In the tourist hub of Phuket in Thailand, the shops and bazaars would normally be packed with Russian tourists. Hotel companies remain unsure of their future after many Russians canceled their vacations when Russian airlines suspended flights to Phuket in March 2022. While foreign arrivals accounted for 59% of arrivals at Phuket airport before of the pandemic, this figure was 35% in the first half of 2022. .
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Now, resorts scattered around the world, from Sharm el-Sheikh in Egypt to Varadero in Cuba, are taking economic hits with low hotel occupancy levels, resulting in job losses, bankruptcies and drops in revenue.
Turkey attracted seven million Russian visitors in 2019 to tourist destinations such as the Mediterranean resort of Antalya. It was popular with Russians because of its beaches, all-inclusive tour packages, and easy-to-obtain tourist visas on arrival. The city received more than 3.5 million Russian visitors in 2021.
With forecasts of fewer than 2 million Russian tourists in 2022 and a $3-4 billion drop in tourism receipts, the change has led to job losses, as fuel prices and other fuel prices rise. .
It’s an economic blow, as every tourist in Turkey generates about three temporary jobs and every dollar of tourism generates up to $2.50 in revenue for the industries that supply the resorts, according to Al Jazeera.
Falling tourism and foreign exchange earnings are putting pressure on the Turkish economy and its currency, as tourism accounted for 13% of GDP before the war and the pandemic.
Tourist visa prohibitions
The EU has already suspended the visa facilitation agreement between the European Union and Russia, which made it relatively easier for Russians to obtain travel documents. Previous sanctions had included bans on Russian and EU airlines flying to and from Russia. They also limited Russian tourists’ access to international credit abroad.
Many wealthy Russian tourists have switched to trips to Dubai. Yet high-end stores in New York, London and Milan, and in glitzy destinations like St. Moritz and Sölden and popular spa towns like Karlovy Vary in the Czech Republic, are losing business from wealthier Russian visitors.
On the French Côte d’Azur, luxury boutique hotels and expensive seafood restaurants have seen a drop in business. They have not been able to replace wealthy Russian tourists with enough travelers from countries like Bahrain.
Smaller countries, which welcomed large numbers of Russian tourists as lockdowns eased, including Cyprus, the Maldives, Seychelles and the Dominican Republic, found their post-pandemic tourism recovery short-lived. Cyprus, whose service industry, including tourism, accounts for more than 80% of the economy, risks losing up to 2% of annual GDP if Russian and Ukrainian tourists do not return to the country.
Cuba saw a 97.5% increase in Russian tourists in 2021, according to the country’s National Office of Statistics and Information. When that market collapsed, Cuba’s economic recovery plans were affected. Russians were expected to make up 20% of visitors to Cuba in 2022, with far fewer tourists visiting the resort of Varadero.
Find alternative visitors
Thai resorts expect growth in Middle Eastern and Indian visitors to help fill their hotels. Egypt seeks to increase the number of visitors from Latin America, Israel and Asia. The Germans and others, including the Iranians, are already replacing the Russians in Antalya. In Vietnam, there are efforts to increase visitors from Korea, Japan, Western Europe and Australia.
However, many destinations were not prepared for the shortage of Russian tourists and are unable to replace 30-40% of their market with new travellers.
Now that Russian tourists are canceling trips to Crimean resorts as it comes under fire in the Ukraine war, some destinations are hoping Russians will seek an escape by transiting through Serbia, Dubai and Qatar. Destinations such as Armenia, Vietnam and Turkey are also adopting the Russian Mir payment system to make it easier for Russian tourists to pay.
Efforts by destinations to replace Russian visitors will require considerable diversification, marketing and time, as tourists from new markets seek out different activities. While Vietnam expects 5 million tourists in 2022, this is far from the 18 million visitors it received in 2019.
Even when the war ends, there is little chance that tourism will return to normal. Many European countries may not want to receive Russian tourists for some time.
It will be interesting to see if the signs written in Russian in the Egyptian coastal city of Sharm el-Sheikh or Varadero in Cuba will remain, or will be replaced by Chinese or other languages in the coming tourist seasons.