A new report commissioned by Hilton Worldwide titled, Balancing Russia’s tourism deficit: A report on the future of the industry, reveals that incoming tourist expenditure in Russia could double to US$15.3bn by 2016 if vital infrastructure changes are implemented.

The report’s findings show that whilst Russia’s outbound market is forecasted to become one of the fastest growing in Europe, showing an annual average growth rate of 7.4%* from 2011 to 2016, and a doubling of outbound tourist expenditure to $US67.1bn; inbound tourism can only increase if the vital infrastructure changes that have been planned by the Government are fully implemented. In doing so, by 2016 Russia could see a 5%* increase in the number of visitors and the amount spent by incoming tourists double, thereby contributing an additional US$15.3bn to the Russian economy.

The report was commissioned by Hilton Worldwide, which has identified Russia as its fastest growing development market in Europe, with plans to open 28 hotels across the country in the next few years.

Simon Vincent, area president, Europe, Hilton Worldwide, said, “Not only is there the opportunity in Russia to double the amount of revenue generated by incoming tourism, but the fact that outbound expenditure is three times bigger than spend by visitors to the country shows the long term potential that still remains. The report highlights the huge opportunity that exists to make Russia’s tourism industry more competitive and identifies the measures that are urgently needed to help the country attract a greater share of the growing number of international travellers.”

The report was compiled by research specialists Euromonitor International. The findings reveal that whilst Russian tourism has strong potential there remains a distorted perception of Russia among international tourists. This is because of red tape, lack of proper infrastructure, high accommodation prices and unpredictable quality of services.

The simplification of Russia’s visa system will help contribute to the growth of tourism in Russia as tourists still encounter difficulties, with the ease of obtaining a visa varying from country to country. However it is the long period of time needed to obtain a visa as well as the high price of it that is the major problem.

To make Russia’s tourism industry more competitive, the report finds that the ongoing participation of government is required in two directions: investment and creation of a favorable financial environment for tourism to grow, plus education and training in order to achieve improvements in the quality of tourism services. Creating an attractive image of itself as a travel destination, growing online retail, developing event tourism, increasing the number of low cost air carriers and investment in travel transportation and accommodation are all needed to increase visitor numbers to Russia.

Though the majority of tourists are attracted to the larger cities, namely Moscow and St Petersburgh, there is also the opportunity to attract more tourists through the development of small-scale unconventional tourism, such as event-based, ethnic, ecological, extreme and industrial tourism building on the Russian regions’ unique natural sites and historical heritage.

The report finds that it is visitors to Russia from Turkey, China and the UK have the potential to register the biggest growth in incoming tourist expenditure over the next few years.

Patrick Fitzgibbon, senior vice president of development Hilton Worldwide Europe and Africa, said, “We believe there is great potential for Russia’s tourism industry. The country is one of our biggest and most exciting development markets. We have 28 hotel openings across Russia over the next few years, which is more than anywhere else in Europe, with brands including Hilton Hotels & Resorts, DoubleTree by Hilton, Hampton by Hilton and Hilton Garden Inn. We look forward to building on this great momentum by working with the travel industry and government to help attract more tourists to Russia.”

* Figures quoted are Compound Annual Growth Rate (CAGR) which is the average annual growth rate

Balancing Russia’s tourism deficit: A report on the future of the industry was commissioned by Hilton Worldwide, with research carried out by Euromonitor International in June 2012.

A full copy of the report can be downloaded from the following link: news.hiltonworldwide.com

Research methodology for the report involved interviews with key travel and tourism experts - tour operators, travel agencies, industry associations, government agencies and independent consultants - as well as analysis of relevant market data.