Europe Economy

Greece hit as Russian tourists stay at home

Sanctions, weak oil prices and an economic recession are deterring Russians from vacationing abroad, with Russia the only major nation in Europe where tourists are expected to make fewer trips this year than last to other countries on the continent.

The number of Russians travelling to other European countries is seen falling around 9 percent this year compared to 2014, intelligence provider Euromonitor told CNBC. This followed a decline in 2014 as well, as the Russian economy struggles to cope with stinging international restrictions imposed on its banks and energy companies, following its annexation of Ukraine's Crimea region in March of last year.

A holidaymaker passes rows of empty sunloungers and parasols on a beach at a tourist resort in Asprovalta, Greece, on Sunday, July 12, 2015.
Oliver Bunic | Bloomberg | Getty Images

Greece is one country that will likely feel the pinch, as it is a favourite holiday destination for Russian travelers, travel analyst at Euromonitor, Wouter Geerts told CNBC.

"Russia is a major market for the Middle East and Southern Europe and with issues surrounding Ukraine and the boycott of Russian products and embargoes that really stopped Russian tourists from traveling a lot," Geerts added.

"There are certain countries, such as Greece, that will be impacted by the loss of Russian travelers."

A vendor waits for customers at his shop in Athens, Greece, July 7, 2015.
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The number of Russians holidaying in Europe fell to around 35 million last year and is predicted to sink further to close to 32 million in 2015, data showed.

Russian tourist arrivals in Northern, Western and Southern Europe have lulled this year, the United Nations (UN) World Tourism Organisation reported in June. Turkey has also been hit by dwindling Russian vacationers, as Russians make up the second largest source of tourists to the country after Germany, according to the UN.

Around 42 million Russians planned outbound trips to Europe in 2013, as the country enjoyed strong economic growth, boosting household disposable income. But stringent sanctions have helped weaken the country's economy and the International Monetary Fund (IMF) estimates that sanctions could knock 9 percent off Russian gross domestic product.

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While Russia's economy is expected to shrink by 3.4 percent this year, growth is expected to pick up again in 2016, the IMF said in a report published earlier this week.

The strengthening of the Russian ruble against other currencies should boost external demand and help normalize domestic financial conditions, the international body added.