One of the most promising possibilities for increasing tourism is to take advantage of the area’s proximity to Mongolia. “Mongolia has already promoted itself as a brand. Last year, for example, almost half a million tourists visited Mongolia, four times more than came to our region,” explains Alexander Finkelshtein, Executive Director of the Siberian Baikal Association for Tourism. “Mongolia is within spitting distance of Lake Baikal. You can get to Lake Khuvgul on a bus in only seven hours, to one of the most beautiful parts of Mongolia. If the Ministry of Internal Affairs would just figure out the problem with the nearest border crossing, which is currently only open to Russian or Mongolian citizens, the local tourism industry would have an exciting new product, the Baikal-Mongolia tour.”
There is also extensive potential for so-called “ethnographic” tourism. Buriats, who make up a significant portion of the local population, are a unique people who have kept many of their traditions and rituals. Buriat shamans, for example, are more than capable of competing on the world tourism market. One shaman in particular who hails from the sacred island of Olkhon has already become very popular with tourists.
To develop tourism in the region, however, Lake Baikal’s image needs to change from a purely summer vacation spot to a place to relax in winter, too. Organizing winter vacations wouldn’t demand much thinking or money on the part of tour companies. Nature has done most of the work for them. For example, ice diving could become the pivotal part of a winter package. Lake Baikal’s ice is not only uniquely beautiful; it also has a complicated structure that allows divers to observe this beauty by swimming through caverns of ice. There is nothing like it, even in Northern Europe or Greenland.
Out of all the tourist regions we visited, only in Irkutsk Province has private business created a long-term strategic plan for the tourist industry, taking the specifics of the region into account. Though the severely continental climate makes tourism risky business, we were left with the impression that the area just might become Russia’s leading tourist center. However, this optimistic assessment will only become a reality if Irkutsk builds a new, modern airport measuring up to international standards. Without an airport, tourism in the area will stagnate.

Sochi’s biggest business

New buildings are taking over from the old. These freshly built houses rent for 300-1000 rubles a day depending on how close they are to the sea, whether they have air conditioning, and whether they have indoor toilets. In terms of comfort, they are on par with the offerings at hotels or hostels, while being much more pleasant for about half the price.
It costs about $100,000-150,000 to build this kind of hotel. Depending on the hotel’s location, it will pay for itself in three to five years. Only the lucky few can attract tourists with ocean views. The rest try to compensate for less than lovely views by digging pools, planting flowers, building gazebos, or opening bars on rooftop verandas. The city is simply crawling with this new type of accommodation. Those by the sea clean up and improve their section of municipal beach, while those further away fix the roads.
In Russia’s most famous resort town, there are more than 300 of these private mini-hotels. And without a doubt their numbers will keep growing, as there are no other promising investment opportunities in Sochi. This has its positive side, as the tough competition increases Sochi’s ability to compete with resorts in other countries. In their fight for customers, the owners of Sochi’s little hotels are constantly looking for new ways to make their guests’ stay more enjoyable. Some have even started offering breakfast not at the traditional hotel hours of 8 to 10 AM, but whenever guests get up. Others have made agreements with the nearest spa and offer the cure to their guests, or with the large hotel complexes that provide an entertainment package including the use of sporting equipment, weight rooms, and other perks smaller hotels by definition cannot offer.
It seems Russian entrepreneurs are capable of service no worse than abroad, and service is generally cited as the main reason Russian resorts can’t entice tourists away from Turkey, Spain, and other countries. You would think one big ad campaign and Sochi would be the next Anatolia. But things aren’t quite so simple.

The winter and the government

“We don’t have any right to advertise them!” we were told at the Sochi Municipal Department of Resort Affairs and Tourism. Existing laws simply don’t have any provisions for mini-hotels. For this reason, they are built as private homes and then registered at state fiscal agencies as boarding houses. All other services, such as meals, excursions, or concerts, are all provided illegally. In order to create a new legal business category, city employees have come up with their own bill that so far has only had its first reading in the Krasnodar Regional Legislative Assembly. According to their estimates, in just the first year after the law takes effect, 40% of the new tourist businesses will come out from under the table.
The most important factor limiting progress in Sochi, however, is the relatively high cost of accommodations. Russians might regain their faith in Sochi as opposed to Turkey, Spain, and so on if only prices were lower. However this problem is beyond hotel owners’ control. City utilities are expensive and the summer season brief. Hotel owners are forced to demand more money so that they can maintain and repair their empty rooms during the rest of the year.
Prices would fall and the resort would become more competitive if only significant numbers of tourists could be enticed to come to Sochi in the winter. Local businessmen believe this is possible. In fact, only 75 km away in the area around the village of Krasnaya Polyana, one enthusiastic entrepreneur has been building a European-style sky resort for the last ten years.

Samara: Enough to go around?

“What Russian doesn’t dream of visiting the Volga River?” we thought and decided to head for Samara Province. It turned out that tourism there, as opposed to Lake Baikal and Sochi, is mostly local. Locals come to relax, and come often.
The Volga tourism market has grown considerably in the last two years. According to Mikhail Segal, Commercial Director at Samaraintur, the number of rooms for vacationers increases by 150% a year. Entrepreneurs are building mini-hotels and resorts and are restoring old Soviet accommodations. Large corporations, as rule, invest in large spas and hotel complexes. Successful medium-sized companies are building smaller hotels with five to ten rooms outside of town for visiting partners and corporate events. Individual entrepreneurs who earned their capital elsewhere are restoring abandoned resorts and camps.
Both Samaraintur and other regional businesses committed to improving the tourism infrastructure are confronted with problems typical for today’s Russia. The first problem is the lack of investment. In order to create a decent tourist complex, according to Alexei Kolesnikov, General Director of Zhiguli Finance and Investment Company, you need $300,000-500,000. The investment will pay for itself in three to five years. Though this is not a long time, local investors “aren’t interested.” Investors from elsewhere--be they Russian or foreign-- “still haven’t noticed us,” as Kolesnikov put it.
Another big headache for the local tourism market is staff. Everyone and anyone, from medical colleges to technical schools for electricians, now offer training in this area, with a corresponding level of quality. The only way the owners of resorts, hostels, and hotels can find more or less decent waiters or maids is to grab people off the street and train them in house.
These problems may hamper tourism development in the region, but they can’t stop it. And there are plenty of reasons to vacation on the Volga.

Open season

According to research by the World Tourism Organization, the world’s citizens currently prefer two kinds of tourism, cultural/educational and ecotourism. This means Russia, with its huge expanses and cultural heritage, has a lot to offer the world market.
Of course, it is still too early to talk about traditional Russian vacation spots and resorts becoming world tourism centers. However, it is already clear that Russian businesses are capable of making this happen. At least in the key Russian tourism regions we visited, entrepreneurs seem to understand already how their area differs from the hundreds of other resorts around the globe. They know that they have something that can’t be seen, tried, or experienced anywhere else.